The Charity Commission has made it clear that the Bill is aimed principally at strengthening the commission’s hand in dealing with the most serious cases, and that for the vast majority of cases it will have no direct impact. ACEVO has accordingly expressed some concern that this will tilt the balance more towards the commission’s enforcement as opposed to its advisory role, which is arguably of even greater importance in raising and maintaining standards of good practice, a tendency that can only be reinforced by recent reductions in the commission’s budget, which is down almost 50% in real terms since 2007. So care needs to be taken to maintain the right balance here. I was encouraged that the noble and learned Lord, Lord Hope of Craighead, underlined that point.

I will mention one or two provisions where there is room for some concern about the breadth or vagueness with which they have been drafted. I will do this quite briefly, because I am conscious that I am picking up on pretty much the same provisions which the noble Baroness, Lady Barker, drew attention to. Concerns have been expressed that Clause 3(3)(b) and condition F in Clause 10(7) go too far in specifying the range of conduct the commission can take into account in exercising its powers of disqualification. Clause 3(3)(b) identifies,

“any other conduct of that person that appears to the Commission to be damaging or likely to be damaging to public trust and confidence in charities generally or particular charities or classes of charity”,

and condition F is,

“any other past or continuing conduct by the person, whether or not in relation to a charity”.

Those are indeed quite wide. The NCVO has concerns that past conduct could be brought into decision-making where it is not relevant to the case in question, since what is damaging to public trust and confidence in charities involves what they describe as an open and potentially subjective test. We will want to look at those provisions carefully in Committee to make sure that the right safeguards are in place.

As regards Clause 7, which gives the commission broad powers to direct the winding-up of a charity, ACEVO believes that the commission should be required to consult the charities sector on the criteria to be used in deciding whether to direct that a charity should be wound up.

Care also needs to be taken that we do not cast the net too wide when specifying the offences that can lead to automatic disqualification, which are covered in Clause 9. The Bill expands the list of criminal offences that automatically disqualify a person from being a charity trustee beyond those that involve only deception and dishonesty. In particular, anti-terrorism legislation includes offences that have an element not only of clear and deliberate wrongdoing but of inadvertent

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involvement. The criticism of the current criteria is that they are too narrow and fail to capture other behaviours that should automatically disqualify an unsuitable person from acting as a charity trustee.

The NCVO does not object to the addition of new offences to the list. However, the inclusion of a number of offences under terrorism legislation has raised concerns due to the extraordinary breadth of the definition of terrorism and the unforeseen impact that that could have on the work of international NGOs. The Independent Reviewer of Terrorism Legislation has expressed concern about the fact that criminal offences under UK anti-terrorism legislation are also capable of impeding the legitimate activities of international NGOs in conflict areas. It has therefore been suggested that the Home Office, the Treasury and international NGOs should meet to discuss how the objectives of antiterrorism legislation can be met without prejudicing the ability of NGOs to deliver humanitarian aid. It should also be remembered not only that participation in voluntary action can play an important part in the rehabilitation of offenders but that ex-offenders can also benefit others on the basis of their experience. For example, the Prince’s Trust specifically employs ex-offenders for many of its jobs.

So there is a general welcome for the Bill, to which I subscribe. Where questions have been raised, there is a good deal of agreement on what those are. I hope and believe, therefore, that after due scrutiny in Committee your Lordships will be willing to give the Bill a fair wind so that it can reach the statute book without undue delay.

6.06 pm

Viscount Bridgeman (Con): My Lords, it is a great privilege to follow the noble Lord, Lord Low, with his outstanding experience particularly in the field of charities for the disabled.

After a maiden speech there is sometimes a perfunctory statement from the following speaker that we hope to hear future interventions from the maiden speaker. However, glancing at the forthcoming business, and indeed at this Bill, I see that we are fortunate in not having to wait long to hear again from the noble Lord—who in this case is my noble friend the Minister.

It is a paradox that charity is one of the noblest of human sentiments—a point which my noble friend Lord Borwick expanded on—but, in the context of the administration of charities, it is also, as my father would have said, open to abuse by individuals who are less than totally satisfactory. I note that the Joint Committee, so ably chaired by the noble and learned Lord, Lord Hope of Craighead, outlined three issues on which regulation is required: honest mistakes that trustees make, persistent mismanagement of charities, and deliberate abuse where people go out of their way to abuse their position in a charity for personal gain or some other non-charitable purpose. The committee added that the third was, fortunately, the rarest, but also hard to assess accurately. It is therefore appropriate that a major part of the Bill—Clauses 2 to 12—deals with the question of disqualification.

In England and Wales it is the duty of the Government, through the Charity Commission, to tread the fine line between policing the administration of charities with

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a firm hand but, at the same time, with an appropriate—if not light, then certainly imaginative and helpful—touch. I suggest that the Bill is a further small but significant step towards giving effect to those intentions. I pay tribute to the work of the Joint Committee, chaired by the noble and learned Lord, Lord Hope, and the statutory review by my noble friend Lord Hodgson of Astley Abbotts, together with the Law Commission’s work on social investment. Their work has contributed to the creation of a Bill that is not only reasonable and constructive but, if I may say so, realistically constructive.

The tightening of the provisions on disqualification is timely. Of the many loopholes that have been closed I particularly welcome the action to address the glaring anomaly that permitted disqualified trustees to hold other trusteeships or, indeed, senior management positions in charities. That is addressed in Clause 10(2) with the introduction of new Section 181A, to which my noble friend Lord Hodgson referred.

Clause 1 inserts new Section 75A, which provides the commission with the power to issue a warning to a charity or a charity trustee. This is particularly welcome as it reinforces the concept of proportionality without the need for a statutory inquiry. The Explanatory Notes—I echo the words of my noble kinsman Lord Chandos—have been particularly helpful on the Bill. They give three useful examples of when the warning power could be used, relating respectively to unauthorised payments, governance problems—for instance, a repeated failure to call AGMs—and where a statutory inquiry would be disproportionate. The introduction of this procedure has many advantages, not least in freeing up time for the commission to concentrate on more serious matters.

Another significant feature of the Bill is Clause 13, concerning social investments. This has been well covered, particularly, again, by the noble Viscount, Lord Chandos. I am grateful to the Minister for his helpful guidance on this part of the Bill. I particularly welcome new Section 292A(5) introduced under this clause. It addresses the distinction between a loss of investment and a total loss of funds—again, referred to by the noble Viscount. However, I had some difficulty with this new section, as did my noble friend Lord Borwick, but the Minister has been very helpful in clarifying that a social investment has to satisfy the two conditions set out in proposed new Section 292A(2): first,

“directly furthering the charity’s purposes; and”,


“achieving a financial return for the charity”.

The implications of social investment are quite considerable because of the additional obligations on trustees imposed under new Section 292C, and I have no doubt that this will come back in Committee.

This is a valuable complement to the previous charity Acts and the commission is to be congratulated on giving effect to the many valuable recommendations submitted to it. I have no doubt that they will be further refined as the Bill makes its way through this House and another place.

6.12 pm

Baroness Kramer (LD): My Lords, I declare an interest as a trustee of two small local charities.

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I want to address just two issues, neither of which has been raised so far in this very excellent debate. The first is the power introduced by the Bill for charities to make social investments. The noble Lord, Lord Hodgson of Astley Abbotts, has led the charge on this issue incredibly effectively, and I completely support the proposals that the Bill encompasses.

However, I want to talk about the other side of the coin: the power or capacity, particularly of small charities, to issue those social investments—specifically, for example, social impact bonds. The noble Lord, Lord Hodgson, talked about this, as did I, in the debates on the then Financial Services Bill. We thought that we were getting a response from the Government but in the end it went nowhere, and I hope that this Bill provides an opportunity to retrieve that situation.

A charity may wish to issue social investment bonds because, for example, it has been successful in achieving a contract with a local authority for a payments-by-results project, perhaps working with disadvantaged youngsters to keep them on the straight and narrow, rehabilitating prisoners or all kinds of other important areas. I say to the noble Lord, Lord Borwick, that a charity will have typically won the contract because it will have come forward with innovative ideas on how to tackle the problem in a way that government institutions have historically failed to do. So let us not denigrate the work that is done under contract; it is very important.

If a small charity succeeds in winning a contract, it now has to fund the project, and the obvious direction is a social impact bond. However, under Section 21 of FiSMA 2000 and the financial promotions order that sits underneath it, in order to go to ordinary people and ask them to purchase one of those bonds—perhaps for £100, £200 or whatever—it has to meet the demands on any publicly marketed investment, including a full prospectus under the Companies Act. The estimate is that, on the cheap side, an organisation might be able to achieve that for, say, £150,000. I believe that the noble Lord, Lord Hodgson, thinks that to achieve that benchmark the figure is closer to £500,000. However, it is obviously a ridiculous and completely impossible amount for any small charity that engages in a relatively small project.

We are left with the ridiculous situation that members of the charity—one of whom might be one of your Lordships—could go to members of the community who are excited by the project, who know a lot about it and who think that it is really worth while and say, “Would you make a donation?”. That would be entirely legitimate. If they were to say, “Would you give me some money? In fact I might return it to you. It’s not guaranteed but I might be able to give it back to you when I get my payment through payment by results, and indeed give you a little financial interest on top of it”, that, I am afraid, would be an imprisonable offence. It is an absolutely insane situation which needs to be tackled.

When we went through the Financial Services Bill, the Treasury Minister, the noble Lord, Lord Sassoon, made it quite clear that he understood the problem but, for lack of time and focus in a very complex Bill and at a time when, frankly, financial services were under very broad scrutiny because of so many abuses,

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the Government were not able to give the time and attention to come forward with a solution. The noble Lord, Lord Hodgson, suggested that there would be a way of introducing a new section under FiSMA that, for example, allowed people to self-certify as a sophisticated social investor without the need for this complicated and expensive process. That could be added to, for example, a materiality benchmark so that an individual could not invest more than £200. Various kinds of packages could be put together to make that possible.

This truly is important for small charities. The majority of donations in this country are, frankly, hoovered up by the big boys and the little charities struggle in every way to access finance, no matter how worthy their causes. It is often their very local communities that understand the good work and the specific projects that they do. Therefore, there is an enormous argument for using this Bill to deal with what I think everyone recognises as an unfortunate and unintended problem.

Perhaps I may raise one more issue, which goes into the area of abuse. My 95 year-old godmother, like many people of her generation, has always been very generous to charities. One can imagine that her daily post includes numerous letters from every charity under the sun requesting money. She can deal with that but there is one form of request that is exceptionally stressful, and that is the request that comes with unsolicited goods in it. I name the British Red Cross as being particularly culpable in this area, sending coasters, bookmarks and cards of every kind. My godmother feels too guilty to put those items in the bin but she also feels that if she uses them she must make a payment, and surely she is not alone in that.

Personally, I make many fewer donations to the British Red Cross because I despise this form of solicitation, and I am also very concerned that a significant proportion of anything that I give is used to send these kinds of items out to thousands of other people on an unsolicited basis. However, it is also a form of pressure. I hope very much that the measures considered in this Bill will at least allow people to disengage from receiving these solicitations or from having their money spent on providing such items for other people. It is a subtle form of pressure that I think, frankly, ought to be beneath any good charity.

6.18 pm

Viscount Eccles (Con): My Lords, following the noble Baroness, Lady Kramer, there is undoubtedly a problem—and an understandable one—in relation to pressure. I have always said that if you are a fundraiser, you need a wicked smile and not to leave until you have the money. It is not easy to raise funds. That leads me to the reflection that, if life is complicated and quite often ends in a muddle, we cannot expect the charitable endeavour in this country ever to be anything else but pretty complicated and quite often in a muddle.

I have one other reflection before I start, as it were. My noble friend Lord Borwick suggested that he who pays the piper calls the tune. We should always remember that if you accept money, you have to pay some attention to the donor.

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For quite a long time, I have been a trustee, fundraiser, adviser and donor—I think that I am probably all of those things still. The ones that need to be on the register are, I hope, correctly on the register. To illustrate the length of time that I am talking about, I am a life member of a charity, for which I paid £20.

This Bill is a welcome measure and one that has been very well prepared. In being prepared, it has been discussed in detail and very well argued. It has the full support of the Charity Commission, and I must say that I have been very impressed in recent times by the way in which the Charity Commission puts its points across to those of us who are engaged. No doubt the detail will come out in Committee and later, and other noble Lords have talked about that with much more understanding than I would have done.

Let me go to the wider scene. We all agree about the merits of charitable endeavour: its very long history and the need for it, which grows as life gets more complicated. I think that we all agree that there needs to be a balance in our country between the way that the economy is run and what it is expected to do, how taxation should play its part, the democratic aspirations of the people who pay the taxes and how we control public expenditure. That balance has never been more in question than it is now.

Although I quite understand the point made by the noble Viscount, Lord Chandos, that the Government may expect, in some way, the gaps to be filled by others as they try to reduce public expenditure, my view is that the gaps are inevitable. The noble Viscount gave us a very good explanation of why the gaps are there and need to be dealt with. He cited innovation, and that must be right. Lots of things go on in our society which do not fit the postcode lottery school of thought that everything should be the same for everybody. Lots of things go on where ticking boxes about the highest common factor, or even the lowest common denominator, simply does not work and where independent solutions are needed. If charities are full of innovation, some of the solutions will work and some of them will not work so well. However, the flexibility, imagination and judgment that charities can exercise are a very important component of the total picture in our society.

Indeed, on occasion, charities will come up with ideas that we will think are slightly zany. However, if people are exercising flexibility, imagination and judgment, the chances are that there will be problems, that things will go wrong and that some people will deliberately make things go wrong. Therefore, we clearly need a monitor and regulator. We have one with what is, in my view, a growing and excellent database of information, which has made very welcome progress in recent years—on that I entirely agree with the noble and learned Lord, Lord Hope of Craighead. The greater powers for it to exercise its role are welcome as well.

In thinking about the impressive performance of the Charity Commission, we have had reference to the 160,000 regulated charities, the staff of 300 people and the budget of £20 million a year. If noble Lords were to look across the regulator scene and try to find another regulator that is making as good a shot at doing what it is required to do as the Charity Commission is, they might look a long way before finding one.

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Much progress is being made, but the really interesting question is, where next? To my mind, the Charity Commission has a clear sense of direction.

The Bill provides for a review, and I want to spend my last couple of minutes on that. The review should be on,

“how the Act affects … public confidence in charities … the level of charitable donations, and … people’s willingness to volunteer”.

There are two negatives to that. First, the motivation for volunteering and the results of volunteering are, in my experience, very complicated subjects. That is for another day, but, in the mean time, I would like to remember, as I always do, that volunteers have a divine right to be unreasonable.

The second negative that I want to get out of the way is about public confidence. It has already been said that there is a danger that Her Majesty’s Government and the Cabinet Office—Parliament, even—can do things that do not improve the public’s confidence in charities. I am sure that that is true. Here we get into the extremely complicated subject of independence, which is best summed up by saying that when somebody tells you that they have independence and are treated at arm’s length, you need to suggest to them that probably their arm is regularly being twisted.

There is an issue around what was billed very prominently—not in the previous Administration but in the one before that—as the third sector. There has been reference today to the degree to which some registered charities are in fact being funded by the taxpayer. There is something there that we have to think about very carefully, because every time you take money, you must remember that he who pays the piper calls the tune.

Another issue is the connection between public confidence in charities and the level of charitable donations. I am not clear as to whether “level of charitable donations” means donations to charities, donations from charities or both. When considering charitable endeavour, one has to be very conscious of the fact that it is both that we are thinking about. For example, Henry Smith was lucky enough to own land that subsequently became part of London. His charity, and others such as the Wellcome Trust, does not spend any time raising money but runs what is, in effect, a massive endowment fund that distributes the income from that fund, and sometimes part of the capital, to other charities. We know a great deal about those very big, top-tier charities. Indeed, the whole charitable endeavour in our country would be completely different if they did not exist. It would be very interesting to have a better grip on exactly how important they are.

Small donors have also been referred to. Charities such as those for birds or lifeboats are massively successful. All through its history the lifeboat charity has been, to a degree, a substitute for money coming from the taxpayer—it is extremely well known and has extremely successful services. However, to introduce a slightly discordant note, sometimes the business of animals gets rather complicated in our minds. We wonder whether we understand what we might call the mass appeal charities as well as we thought.

To me, there is a gap in the middle. There is a great need to understand in much more depth and detail the middle rank of charities. Where do they come from,

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why are they created, what do they do, how do they do it and can we think more positively about how that part of the system can work better than it does now? Indeed, we would probably find that nearly all the investigations undertaken by the Charity Commission to date—it is a formidable number and there has been a formidable rate of increase over the last three years—have been in that middle sector.

I believe that there is the same need about donors. We understand about big donors. They get their names on boards. I was in the British Library this morning and I read the board with some interest. We understand about how small donors behave; there are millions of them and they behave with great consistency. We have heard today about the difficulties that can be faced in that sector. But I do not believe that we understand at all well what the people in the middle do or do not do about forming charities or giving money to charities—their total charitable endeavour. There is huge potential there which we are not at the moment making a good job of tapping. I look forward to the further stages of the Bill.

6.31 pm

Baroness Pitkeathley (Lab): My Lords, I declare my interests as president, vice-president, patron and former chief executive of various charities, as co-chair of the All-Party Group on Civil Society and Volunteering, and as someone who has spent the large part of a very long working life working in or with the charitable sector.

In those roles, I have been familiar with, connected with and at times frustrated by the work of the Charity Commission. I commend the improvements that it has made to its performance over recent years and I support the new powers given to it in this Bill. I would also like to praise the work of the pre-legislative scrutiny committee under the chairmanship of the noble and learned Lord, Lord Hope of Craighead, which suggested improvements to the Bill. The House should also be mindful, as it has been throughout this debate, of the excellent work done by the noble Lord, Lord Hodgson of Astley Abbotts, in his review of the Charities Act 2006, which was an important background to the provisions we now see in the Bill. Of course, like others, I pay tribute to the excellent maiden speech of the Minister, and look forward to working with him as we proceed.

This is a good, useful and welcome Bill. We shall in Committee be able as ever to suggest improvements, strengthening and so on and, as we shall be in the Moses Room, there will be opportunities for useful discussions about the role and future of the Charity Commission, so here I will raise only one or two cautionary thoughts. While I am fully supportive of extending the powers of the Charity Commission to regulate in the interests of public trust, there are dangers about focusing too strongly and solely on the commission’s enforcement role. The commission has an important role too as an adviser, particularly on charity governance.

The quality of charity governance is equally as important in promoting trust in charities as is tackling abuse. It is welcome that trustees will be able

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to be removed or disqualified, and no doubt we shall have much debate about how judgments are to be made as to the fitness or otherwise of trustees. What is seen as damaging or unfit in one charity might be seen as appropriate by another, especially bearing in mind the huge range in size and type of charity. Many are tiny and run from someone’s kitchen table, as we know. Some are large multimillion pound enterprises barely distinguishable from businesses. We must ensure that in our enthusiasm for propriety we do not damage or interfere with the spirit of voluntarism, which is the lifeblood of the charitable sector. I am sure that your Lordships’ House, in its inimitable way, will be able to achieve this important balance. With regard to the advisory role of the Charity Commission, we should also remember that advice early in the process of registration can head off many a problem at the pass, preventing larger difficulties that need a stronger reaction down the line. In this regard, the new warning power will be very welcome. In my experience, the charitable sector should look to the commission for advice, support and guidance as well as policing.

I am aware that lobbying and campaigning by charities is not the subject of this Bill, but we cannot fail to have noticed that in the recent general election campaigning charities were not as prominent as they have been in the past. That may be because the agenda for the election was less focused on topics of concern to charities, but it may also be due to a certain nervousness about speaking out given the clear disfavour that has been expressed in some quarters about this type of activity, not least in your Lordships’ House this evening. This is of particular concern to me as former CEO of Carers UK, whose campaigning—absolutely non-party-political campaigning—has been fundamental in raising the carers issue to the importance that it now enjoys. As this is Carers Week, I feel justified in reminding your Lordships that we should bear in mind the importance of charities representing the views of underprivileged sections of our society as we examine this Bill

In drawing attention to the role of the Charity Commission as adviser as well as regulator, I am only too well aware of the resources problem that the commission can face. The Bill gives the Charity Commission increased powers but no lasting increase in its budget. Whether in the long term this is feasible is something that we must all—the Government, the charitable sector and the commission itself—be extremely concerned about.

I turn now to the social investment section of the Bill and declare a further interest as chair of the Big Society Trust, which oversees the work of Big Society Capital—a leading wholesaler in the field of social investment. The Bill introduces a power for charities to make social investments and sets out trustees’ duties in relation to social investments. The social investment market has grown significantly, as we have heard, and helped many charities and social enterprises, but too many are not able to access the capital they need. It may be that they are not investment-ready, that loans are considered too risky for a charity to take on, or that the transaction costs are considered too high. Charity trustees have been particularly reluctant to

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venture into this area. In this regard, the encouragement and support given to trustees in the Bill will be especially welcome.

I also want to draw the House’s attention to the setting up, in a collaboration between the Cabinet Office, the Big Lottery Fund and Big Society Capital, of Access, the Foundation for Social Investment. Through two programmes—the growth fund and the capacity-building programme—Access aims to fill the gap which many charities at present find exists when they try to access social investment for innovative projects that they want to put in train for their beneficiaries. The noble Baroness, Lady Kramer, may be interested in the Access foundation. Finance will be provided that blends grants with loans, which will help to provide reassurance about the risks of this type of finance. The foundation will also be able to make smaller loans, perhaps up to £150,000, and to reduce the costs of those smaller investments. Many charities are nervous when taking on this type of finance for the first time, so the support and capacity building provided by Access will be especially welcome to many charities and perhaps particularly to their trustees.

Social investment never has been and never will be the solution to all the resource problems of the charity sector, especially at this time of growing need for so many of the recipients of charitable services. But it can make a useful and important contribution, enabling charities to be more sustainable and deliver greater impact, so the provisions in Section 13 are very welcome. I look forward to detailed consideration of the Bill in its further stages.

6.39 pm

The Earl of Lindsay (Con): My Lords, I welcome the maiden speech of my noble friend Lord Bridges of Headley and I congratulate him on his appointment as a Minister. I share with him the experience while on the Front Bench of carefully prepared briefs being shredded by the noble Lord, Lord Williams of Elvel. That is a memory that will not fade.

First and foremost, I welcome the Bill, and in doing so I should declare an interest in having various roles in or links to charitable bodies as listed in the register. In principle, I support any measures that can be sensibly developed to give the public greater confidence in the probity and good governance of the charities they choose to support, and to provide charities themselves with greater protection from individuals who are either unfit to be trustees or who might seek to exploit them. I therefore support the Charity Commission being given new powers to take action when necessary against individual trustees or, where appropriate, against the charities with which they are involved.

Public and donor confidence in the probity and governance of charitable bodies strikes me as essential. In supporting the increased powers that are being proposed for the Charity Commission, I acknowledge at the same time that even with these increased powers, the scale, magnitude and extraordinary diversity of the 160,000-plus charities for which it is responsible will continue to pose a considerable challenge for it, given the resources that it has available—and that is before one considers the large number of unregistered charities, as mentioned by my noble friend Lord Hodgson

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of Astley Abbotts. The figures are startling. There are probably a third of a million charitable bodies throughout the UK with more than 1 million trustees.

Recognising this continuing challenge for the commission along with the Government’s commitment to a more intelligent approach to regulation and its enforcement, I want briefly to explore an additional, parallel opportunity for improving confidence in the governance of charities and the fitness of trustees to perform their duties. It is an opportunity that I believe could be developed alongside the enactment of the new statutory powers being proposed for the commission. As well as delivering greater confidence, it could assist the commission in enabling it to focus its efforts and resources in a more risk-based manner, and to resort less frequently but more effectively to the exercise of its proposed new powers.

In raising this opportunity, I should declare an interest as the chairman of the United Kingdom Accreditation Service—UKAS—which is the country’s national accreditation body, as it is in this role that I have been involved in exploring a number of different initiatives to promote demonstrable good governance and management in the charity sector. I should add that UKAS, as the national accreditation body, already supports voluntary and regulatory standards across a broad range of policy areas in a way that benefits both the regulator and the regulated. There are therefore some useful precedents in other policy and regulatory areas on which to draw.

Current discussions with a number of relevant parties in the sector are exploring whether agreed standards, underpinned by accredited certification or inspection, might be a useful and robust means by which the quality of a charity’s governance or the calibre of a trustee can be demonstrated to a donor, a regulator, or indeed the public interest. In recent years, bodies such as the NCVO have developed a number of different voluntary standards and codes of practice for the sector, and many charitable bodies have adopted one or more of them. However, given the general need for greater confidence in governance and the calibre of trustees, the current discussions are exploring whether there might be multiple benefits from aligning these voluntary standards more closely with the regulatory requirements and underpinning those certifying the charities for their compliance against them with UKAS accreditation.

It has also been recognised that such an approach might at the same time be an opportunity to address the challenges that many charitable bodies face, such as how the multiplicity of standards, codes of practice and awards makes it difficult for organisations to decide which ones to use. There is a need to identify which standards or marks are valid and meaningful, along with the need for a more coherent and rationalised approach. Such an approach, intelligently designed and configured so that it complements the objectives sought by this Bill and intelligently endorsed so that compliance is recognised and, where appropriate, rewarded by external parties such as the regulator, could have a significant effect on improving the standard of both charities’ governance and trustees’ abilities. It could be value-adding for charitable bodies that choose to be certified as having adopted the relevant standards.

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It could increase public, regulatory and donor confidence in certified charities, and assist the Charity Commission by enabling it to better direct its efforts and resources to where there is the greatest need for oversight or intervention, thereby making it a more robust regulator. It could also reduce the need for costly legal action.

While potentially having a significant impact where it matters most, such an initiative could none the less remain entirely voluntary. It would be largely owned and driven by the sector, and it could be managed so that the bodies for which it is not relevant do not feel compelled to participate. At the same time, a more robust and better-recognised standards-based option, underpinned by accredited certification, might be helpful in respect of the large number of charities that are not registered with the Charity Commission, and obviously to the large federated charities.

As I said at the start, I fully support the Bill and the proposals that it will bring forward, but I believe at the same time that there may be an opportunity to develop a credible regime of voluntary, well-designed, sector-owned standards, underpinned by accredited certification that will, in conjunction with the provisions of the Bill, help to address the concerns surrounding governance in the charities sector.

6.46 pm

Lord Green of Deddington (CB): My Lords, I first congratulate the noble Lord, Lord Bridges of Headley, on a most impressive maiden speech. I thought that it demonstrated the elegance, economy and judgment that bode well for his future in this House and in the Government.

I shall be very brief. I would like to focus just on Clause 10 covering the revised powers to disqualify a trustee. The noble Baroness, Lady Barker, spoke of a possible chilling effect on Islamic charities, and I think that similar concerns were voiced by the noble and learned Lord, Lord Hope, and the noble Lord, Lord Hodgson. I come to this from a rather different angle. We need to be fully aware of the risk that our charity system can be exploited by Islamic extremists, who pose a very serious threat to our society. I speak with some background in both counterterrorism and the Middle East.

Noble Lords will be well aware that charitable giving is a fundamental and of course very welcome tenet of the Muslim faith. They may also be aware of the difficulty that Muslims often feel when challenging actions that are dressed up in religious clothing. It follows, therefore, that a charitable cloak is ideal for Islamic extremists in pursuing their intentions to infiltrate Muslim communities in Britain. Of course we have to tread gently in these matters, but we also have to be firm. I suggest that there is a clear case for strengthening the powers of the Charity Commission when such activities are identified.

At the same time, of course, it is no less important to be quite sure that we do not interfere with proper charitable activity in the region. I speak as a former chairman of Medical Aid for Palestinians. I am well aware of the need to ameliorate the appalling situation in which Palestinians find themselves in the Occupied Territories, and of course one need hardly mention

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the problems of Syria, Iraq, Libya and Sudan. Those charities must be allowed to operate. However, what we are talking about here is, frankly, dodgy trustees, and when they are detected by whatever agency, there must be powers which the Charity Commission can use to deal with it.

I think that covers it, and I commend the Bill.

6.49 pm

Lord Moynihan (Con): My Lords, first, I echo the congratulations which have been offered to my noble friend Lord Bridges, with whom I had the pleasure of working some 10 years ago when on my noble friend Lord Howard’s team. He had clear insight, humour and intelligence which shone through in all our dealings, and there is little doubt that he has replicated that again today and will enjoy life in your Lordships’ House.

I am very supportive of the principles of the Bill, and I declare my interests, which are in the register: I have worked closely with the Haberdashers’ Livery Company on its educational initiatives, and I have interests in a range of sports charities. I am conscious that there is one area which has been much debated in the context of the work of the Charity Commission—the often challenging subject of the public benefit requirement. That is a difficult issue because there are advantages to having clarity in the Bill but that would be complex and challenging, as is the guidance that is available. That debate needs to continue and I intend to raise it in a specific context—the advancement of amateur sport—in Committee.

The Charity Commission has recognised that there is room for improvement, and we need to help charities understand that, far from being an irrelevant distraction, the public benefit is one of the core questions of mission. It is about charities being clear what their aims are, who they serve and how they serve. No simple statutory definition of public benefit exists; it has therefore been contested and is subject to case law. Fee-charging schools have been recognised in the voluntary action research in the Sheffield Hallam University report as very well informed on the subject, yet they have been involved in costly Upper Tribunal cases. So there is uncertainty, misunderstanding on occasion and a lack of impact. This subject has led to opaque debate which I hope will be clarified.

The report concludes that if independent schools are to benefit from the privileges of the charity sector they have to be clear that charities are working for the public benefit in an understandable way. I believe that Parliament needs to define public benefit more precisely, as opposed to the alternative route at present, namely the Charity Commission developing practical guidelines. That is especially important since public benefit needs to be built in to the purposes of the charity.

I am not alone: the Select Committee on Public Administration report stated that the current position on the public benefit test has been,

“an administrative and financial disaster for the Charity Commission and for the charities involved”.

The Charities Act 2006 was considered to be “critically flawed” on the question of public benefit. The report said that the Act removed the presumption of public

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benefit from religious, educational and anti-poverty charities and required the Charity Commission to create guidance on public benefit, but it did not give a definition. The report stated that changes in the Act left the Charity Commission in an “impossible position” and led to costly Charity Tribunal cases involving independent schools, which I have mentioned. The committee said that the 2006 Act had absorbed vast amounts of energy and commitment, as well as money. Bernard Jenkin, from another place, said:

“We should never have opened up the whole can of worms called public benefit. Parliament needs to legislate, because the time and money being wasted suggests the act as it stands is not well-drafted and needs to be amended”.

I introduced the governance of sport Bill shortly before the election, in which I proposed that the Secretary of State for Education should table an annual report to Parliament for debate in both Houses entitled The Transformation of School Sport, documenting the state of sport in schools in England and Wales. Specifically relevant to today’s debate, I proposed that all schools should publish annually a report setting out policy in relation to sharing schools’ sports facilities and coaching expertise with state primary and secondary schools in order to benefit the local community. Effort made in the previous year to implement such a policy should also be covered. I took the view that all schools holding charitable status should submit reports as set out in Clause 4 and that the Charity Commission should take into account such reports in assessing whether the school continued to meet the public benefit requirement in Section 2(1)(b) of the Charities Act 2011.

In pursuing this objective, I believe that we should place public benefit on the face of the Bill. To avoid the complexity of a wide debate, I suggest that we legislate in a specific area of public benefit as it applies to the promotion of amateur sport, directed at independent schools holding charitable status. Those colleagues on all sides of your Lordships’ House who take a keen interest in sport will, I hope, take the opportunity in Committee to focus on the specific requirement for independent schools to deliver public benefit under the Charities Act. We will explore whether it is possible to define public benefit specifically to ensure that independent schools should be required to share their sports facilities and co-operate with primary schools in their catchment area. Many independent schools achieve this objective and achieve it admirably, through dual use of their facilities, engagement with local clubs in after-school hours, as well as coaching and pupil engagement. But there is a lack of clarity as to what specifically is required from schools to deliver public benefit under the Charities Act. The purpose of my intervention is to continue that dialogue between sports organisations, independent schools and those who will be in Committee as to whether primary legislation in this context is desirable.

Why do I raise the subject of sport? I have in the past highlighted the fact that more than 50% of our medallists at the Beijing Games came from independent schools. That means that half of all our medals for Team GB came from just 7% of the children in this country. In the excellent Ofsted report a year ago entitled Going the Extra Mile, Michael Wilshaw said:

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“Only 7% of school-aged pupils attend an independent school in England at any point in time and only up to 14% of students aged 16 or above are reported to have attended an independent school at any point in their schooling. If maintained schools and independent schools were equally successful in nurturing sporting talent, we would expect approximately 86–93% of elite sportspeople to have been educated in a state school. However, 41% of the medallists from the UK team from the London 2012 Olympic Games were reported to have attended an independent school”.

I strongly believe that we need to address this imbalance. Independent schools are very well placed to play an important role in assisting state schools in their catchment area. That statistic of 41% of our medallists from Team GB in the London Games coming from 7% of our children means that thousands of talented young athletes are not being identified in the state sector. We have a duty to identify and develop that talent and to create a pathway for it from primary school to podium.

There are schools that are doing this outstandingly well. Their interpretation of the charitable requirement for public benefit is very clear. I cite Tonbridge School as an example. It works with 27 primary schools; it engages with those schools and provides the opportunity for boys to help with coaching, for state schools in the area to have access to its facilities and for a community action co-ordinator to work with those schools. Every year the school brings nearly 1,000 children from the primary schools in its catchment area to an Olympic day. It also sets up a freshers’ fair at the end of the day, when it invites local clubs, local community clubs and local sports clubs and the governing bodies to come to the school so that they can engage with the primary schoolchildren, their teachers and their parents to encourage them to become engaged in sport.

The best of our independent schools are doing exactly what I seek. The problem is that that is not a universal position for independent schools. I believe that focusing on the legislation before us, as we should, provides an opportunity to unlock the challenge and the real opportunity there will be for enabling public benefit to be interpreted in a very clear way to engage independent schools with local communities. If each of our independent schools built a relationship with the local primary schools and their local communities similar to that of Tonbridge School we would transform this country when it comes to the provision of sporting opportunity and engagement with the state schools and independent schools. That is much needed as part of our legacy from London 2012.

In closing, I cite John Claughton, chief master of King Edward’s School, Birmingham, who shares this vision. He identifies two kinds of resources: facilities and people, and says:

“Much good work has been done over the past decade or so in making the high quality facilities found in many independent schools available to local communities”—

a commitment, incidentally, that pre-dates discussions about charitable status and public benefit. There are numerous examples of partnerships with local schools and communities to be cited. He says:

“Not all former professional sportsmen and women have the skills or the desire to be both teachers and coaches. Many are excellent coaches but do not have the qualifications, desire or skills to be full-time teachers. These colleagues would enjoy working as full-time coaches across a variety of schools …

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Professional coaches employed (and frequently housed) by independent schools mainly work during the afternoons (when team sports are usually scheduled), early evenings, and at weekends. These members of staff could be employed on contracts where they spend some of their mornings (and non-sports afternoons) working in local state schools. The cost to the state schools would be low (calculated on an hourly basis without the additional costs of employment which are carried by the independent school) but would offset some of the costs incurred by the independent school”.

I believe that we have a far-reaching opportunity through this legislation to address a key, albeit complex, area of charity law. In so doing we can provide much-needed clarity over the concept of public benefit, reduce the Charity Commission’s focus on costly Charity Tribunal cases, and, above all, link our independent schools to state schools through the dual use of facilities and coaching to provide a genuine sports legacy to London 2012.

7.02 pm

Baroness Brinton (LD): I start by also congratulating the noble Lord, Lord Bridges of Headley, on his maiden speech. It is interesting that others have commented on his mix of charitable and business interests, but much of the charitable world has benefited from the involvement of those in business and industry. Having served as a trustee of a range of charities, and on the executive of charities, over the last 20 to 25 years, I know that the expertise brought in from outside is one of the things that has most transformed the charitable sector. I do not recall any charity talking about risk assessment any particular detail 20 years ago in. The whole planning of activity and finance has been transformed in smaller charities across the country, and there is much to commend the charitable sector in that regard. I am delighted to welcome the Minister because of his expertise, but also because he embodies the expertise that we see in our charities throughout the country.

I declare my interests as recorded in the register. As I have already outlined, I have current and past trusteeships. I am a trustee of UNICEF UK, of the Joseph Rowntree Reform Trust and of UFI Charitable Trust, which provides grants for technology in further education and which used to run learndirect. That is a very diverse range of charities, which sums up the whole sector: we all come with expertise from different areas, but public benefit is key. I am very glad to follow the noble Lord, Lord Moynihan, because later in my speech I will refer to disbenefit, detriment and harm—issues that have not been raised so far today.

I am a trustee of UNICEF UK and in the past have been a trustee of Christian Blind Mission, both of which work in international development. They have an understanding of assessing risk in the field around the world for staff and volunteers, and for the beneficiaries in those communities, who often are at risk from terrorists, opposing armies or natural disasters. It is always difficult for those charities to assess such risk and to make a decision when things are happening thousands of miles away. I echo the concerns expressed by others about the breadth of restrictions relating to any activity that might come up against terrorism. However, most other speakers have thought of that

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only in the context of charities run for the benefit of Muslims and those in Muslim countries. That is not the case. Any charity working in international development has to be fully aware of it. We need to look at the practicalities of what is happening in different parts of the world, rather than make assumptions. It becomes very easy to use a blanket statement—“We can resolve this, we can stop people being trustees in the future, we can wind charities up”—when it is actually extraordinarily difficult for the charity to control some of the things happening on the periphery.

I also wanted to ponder the point made by the noble Lord, Lord Borwick, on the different nature of charities and his interesting notion that we could have a registered charity versus one that was publicly funded. I have to say that, for me, that jars rather. In recent years, many charities have started to receive funding from the public purse—not just from government, but from local government and from the National Health Service—to deliver services to a particular community that that charity may understand well. Indeed, many people who have said that it should be not just the state that delivers those services have welcomed the expertise of a large charity or a small charity that can provide something relevant. In my book, those charities deserve just as much the high accolade of being a registered charity, as outlined by the noble Lord, Lord Borwick, simply because of their expertise and public benefit, despite the fact that the resources may come from the public purse. I therefore worry that we will get into a semantic debate about “which charity” and where its funds come from. I understand that the nature of charities has changed as money has come from the public purse, as well as from private donors.

In international development, we have chosen to move away from handing funding over to foreign Governments. In the previous coalition Government, we made a particular point where there were concerns about human rights. We handed money to charities to deliver partly because they were accountable to us. I am concerned that they would be denigrated as not quite a top charity if they received government funding.

The focus of what I want to say comes back to this issue of “disbenefit”. I welcome the clauses in the Bill that give the Charity Commission further strength and resource, particularly official warning by the commission and other actions that it can take. However, I have spoken in your Lordships’ House before about the Exclusive Brethren, also known as the Plymouth Brethren Christian Church. It had been asking since February 2009 for recognition for the Preston Down Trust, one of its meeting halls. There was an investigation —one of the few that the Charity Commission has carried out over the years, given the hundreds of thousands of charities registered—partly because there was concern about public benefit. It became apparent in its investigation that there was public disbenefit, detriment and harm. The Bill does not seem to address those issues. I will come back to those in more detail in Committee.

Something that concerned me from the investigation and the subsequent Charity Commission report is that—despite much detail in the report that accepted that there was detriment, harm and disbenefit— the Preston Down Trust was given charitable status.

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That seems quite extraordinary. I understand that it was given with the proviso that changes had to be made and that the commission would assess it, but if we are to be strict in other areas of the charitable sector, I wonder whether we should also be strict if we or the commission see evidence of detriment or harm, and whether there should not be provision of charitable status. The organisation submitting the application should have to prove that things had changed and that it was now able to offer public benefit as well. Therefore, I will seek an amendment from the Minister on that issue and look forward to discussing it at a later stage.

Overall, the Bill makes the real strides in policing and regulation that the Charity Commission itself says need to be made if it is to be able to do its job. I echo the comments of those noble Lords throughout the House who said that we must also make sure that the Charity Commission has the funds to deliver these provisions. I hope that the funds will follow to meet the extra requirements and responsibilities that the Bill will place on the commission.

7.10 pm

Lord Watson of Invergowrie (Lab): My Lords, I am pleased to add my name to those of other noble Lords who have welcomed the Minister to your Lordships’ House, and to congratulate him on a distinguished maiden speech. There cannot surely be many legislatures where a maiden speech can be delivered from the Front Bench—although I was privileged to be an elected Member of the resumed Scottish Parliament in 1999, when, of course, all ministerial speeches were maiden speeches.

The noble Lord is perhaps fortunate in being allowed to cut his ministerial teeth on one of the least controversial Bills likely to come to your Lordships’ House in this parliamentary Session, but that does not mean, I suspect, that our days in Committee will be tame. We on these Benches will seek to improve the Bill where we believe that that is necessary—although, given the Minister’s experience to date, I have no doubt that he will take that in his stride, his tender years notwithstanding. I say that from the slightly unnerving position of facing a Minister more than 20 years my junior.

We have heard an interesting debate reflecting the considerable experience of noble Lords in various forms in relation to the charity and voluntary sector. I like to call it the third sector—a term which I think my noble friend Lord Chandos used—but perhaps that seems to be a bit out of favour at the moment. However, we understand clearly what we are talking about. As those contributions demonstrated, the Bill is not one likely to cause much controversy or disagreement, providing, as it does, for greater freedom for the Charity Commission to act where there has been abuse within a charity, either by the charity itself or by a trustee. The new powers for charities to make social investments were a welcome, if surprise, addition to the Bill, not having been part of the draft Bill that was the subject of pre-legislative scrutiny between November last year and February this year.

I was fortunate in being a member of the Joint Committee of both Houses which undertook that scrutiny, and I pay tribute to the noble and learned Lord, Lord Hope of Craighead, who chaired the

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committee with distinction and who has brought his wealth of experience to bear on the debate today. Like him, I welcome the Government bringing forward this Bill without delay.

The Government have accepted many of the Joint Committee’s recommendations, although it is disappointing that a comparison of the Bill with the undertakings given by the previous Government in response to the committee’s report reveals that eight commitments given then have not been met. Clearly, I do not expect the Minister to respond to those points this evening, but I and colleagues will raise them in Committee, seeking to ascertain what changed between March and May—apart, that is, from the disappearance of the Liberal Democrats from government.

The Charity Commission has a statutory role in maintaining public trust and confidence in charities—a duty which is more necessary than ever at a time when criticism of charities, not least in terms of fundraising, is increasing. However, the commission also acts as the regulator for the sector. It could be argued that there is an inherent contradiction in those two roles rather in the manner that applies to the BBC Trust, but the commission has those dual responsibilities and it is important that it has the necessary powers to ensure that charities are compliant with their legal obligations. Many noble Lords, most notably perhaps the noble Baroness, Lady Pitkeathley, and the noble Lord, Lord Low, made the point that one must not be pursued at the expense of the other. However, I think that the noble and learned Lord, Lord Hope, captured it best when he said that the two were inextricably linked—as I believe they are.

The Association of Chief Executives of Voluntary Organisations stated, in a briefing which I believe all noble Lords will have received, that,

“timely, expert advice from the Commission can prevent problems before they arise”—

a sound point which I believe should never be lost sight of. That said, regulation of charities is, of course, essential, although it should be proportionate. The Charity Commission must ensure that charities are given sufficient room to operate without excessive intervention and regulation.

Although, as I said, the Bill is to be welcomed, there are nevertheless some concerns relating to certain measures, either because they are too vague or too wide—both issues have been referred to by noble Lords today—as well as some provisions that might be added to those already in the Bill. The first of those relates to the additional offences that automatically disqualify someone from acting as a trustee of a charity. The addition of offences under terrorist legislation has, of course, some merit. However, given the breadth of the definition in the Bill, it is quite likely to have a negative impact on some NGOs working overseas, particularly in conflict zones. This was referred to by several noble Lords, who in a sense reflected the experience that they have had with various charities.

These measures could also impact disproportionately on some Muslim charities, as was mentioned by the noble and learned Lord, Lord Hope, and, in a slightly different manner, by the noble Lord, Lord Green. However, the comments which struck me most were

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those made by the noble Lord, Lord Hodgson, who, in highlighting the awful plight of the Yazidis in the face of so-called Islamic State, gave a very good example of how a charity could get into real difficulty. However, I take issue with the noble Lord’s description of these people as freedom fighters. I believe that they are absolutely nothing of the sort. They are psychopaths with a medieval mindset who must be rooted out and put out of business as soon as possible, however that may be done. However, that is an important example of some of the difficulties that charities can get into.

An example was given to members of the Joint Committee scrutinising the draft Bill of an NGO seeking to provide humanitarian aid in a conflict zone, where perhaps the only means of getting aid to people desperately needing it is to make a payment to so-called “gatekeepers” controlling access to those zones. These “gatekeepers” might be representatives of organisations deemed to be terrorists, and any money paid to them could be treated under this Bill as assisting terrorism—but how else could the humanitarian aid be delivered, and would it be in any way appropriate to pursue a charity, or individuals involved with a charity, for simply delivering humanitarian aid?

I certainly would like to see the suggestion made by the noble Lord, Lord Low, taken up—namely, for the Charity Commission to bring together the various organisations involved in providing such aid to discuss the matter, and, I hope, find a way forward. Both Australia and New Zealand already have legislation that exempts NGOs in such situations. However, in response to the Joint Committee seeking the Government’s views on the prospect of similar legislation being introduced in this country, the noble and learned Lord, Lord Hope of Craighead, was told by the then Home Office Minister that the previous Government were quite unsympathetic to the prospect. When the Bill goes into Committee, there will be an opportunity for an amendment on the matter to be considered. Will the Minister give an undertaking that, in advance of Committee, he will hold discussions with his opposite number in the Home Office to seek to bring about a more flexible and practical response to this important matter?

Further, in relation to additional offences that automatically disqualify a person from being a charity trustee, there is a lack of any mention of a person placed on the sex offender register. The Charity Commission has published a strategy for dealing with safeguarding issues associated with vulnerable groups, but it seems strange, to put it mildly, that those found guilty of behaviour serious enough to have them placed on the sex offender register do not constitute a category to which automatic disqualification applies. My noble friend Lady Hayter raised this issue. We believe that this should appear on the face of the Bill, and I hope that it will be possible for this to be achieved in later stages as we progress.

Charities depend, of course, on the trust and confidence of the public, and high standards of fundraising practice are essential to uphold levels of public trust. Recent events and media reporting that many noble Lords will have seen have highlighted that all is not well in this area of the charity sector, although the ability of

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the Bill to introduce meaningful changes may be limited. However, we shall see. The Fundraising Standards Board needs to raise its public profile and convince the remaining 35% of charities that voluntarily raise more than £1 million a year to affiliate to it.

On the latter point, perhaps it is now time to adopt the suggestion of the noble Lord, Lord Hodgson, to require all such organisations to be part of the Fundraising Standards Board. That was in his report of 2012, but he suggested that it should be revisited if the situation regarding fundraising was not resolved satisfactorily. Recent events demonstrate that that is where we are just now, and I can tell the Minister that it is a view supported by the CEO of the board itself that the time has now come to require charities within that sector—that is, those that voluntarily raise more than £1 million a year—to be part of the board. This could be achieved by the Minister for the Cabinet Office utilising the reserve powers given to that office by the Charities Act 2006 to introduce regulations,

“in connection with regulating charity fund-raising”.

Of course, the Minister is in an ideal position to progress that, should he choose to do so.

Other important issues have emerged from today’s debate, one of which is the ability of the Government to force housing associations that are charities to sell off properties against their will. I am rather surprised that only my noble friend Lady Hayter has raised this issue, because it certainly is exercising a lot of minds within housing associations, the vast majority of which are indeed charities. Perhaps the Minister can tell us whether he anticipates that in order to progress the policy that the Conservative Party announced during the election campaign and now intends to implement, primary legislation will be necessary so that properties that are owned by housing associations—in other words, not public property—can indeed be sold off, as the Government intend.

Many noble Lords referred to the vexed question of the demands for the additional responsibilities being placed on the Charity Commission to be matched by the resources to enable those additional responsibilities to be carried out. Although the Prime Minister announced last year that additional funding would be provided to coincide with the introduction of new powers, concerns remain about the resourcing of the commission, which saw a significant reduction in funding during the previous Parliament, as many noble Lords said. The additional powers will be effective only if the commission has the resources to use them properly.

Clause 14 states:

“The Minister for the Cabinet Office must carry out reviews of the operation of this Act”,

with the initial one being required within five years of the Bill becoming an Act. We believe that to be too long a delay and that three years would be more appropriate. To some extent, this relates to my previous point about adequate resources being made available, but in any case a shorter period than that envisaged in Clause 14 would enable any changes required to be identified and acted upon as soon as possible; thereafter, five-yearly reviews would be reasonable. This does not cut across the recommendation by the Joint Committee that there should be a broader review of the operation

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of the Charity Commission: rather, Clause 14 refers to this Bill specifically, so if that is what is carried forward, it should be three years rather than five years in the first instance.

Although it is not explicitly part of the Bill, an important issue was raised by my noble friends Lady Hayter and Lady Pitkeathley: a charity’s ability to speak out on behalf of others in pursuit of its objectives. My noble friend Lady Pitkeathley commented on the reduction in the number of charities involved in the recent general election. I believe that that is a natural consequence of the lobbying Bill which went through your Lordships’ House last year, and it represents a democratic deficit because it ought to be perfectly possible for charities to enter the debate without adopting a party-political stance—indeed, it is perfectly possible—and it is much to be regretted that many felt constrained from doing so during the election campaign.

There were also some excellent contributions on the question of social investment, not least from the noble Lord, Lord Hodgson, to whom we are indebted for highlighting this issue some years ago. But I particularly enjoyed the contribution of my noble friend Lord Chandos, whose thoughtful and thought-provoking comments I found very interesting. I look forward to hearing those developed further in Committee.

In conclusion, perhaps there has not been too much disagreement on these Benches or indeed the Benches opposite, but there is no shortage of issues for noble Lords to get involved in when the Bill enters Committee. I am sure that that will prove enjoyable for all noble Lords who have participated today, not least the Minister.

7.25 pm

The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con): My Lords, I thank all those who have spoken for their excellent contributions and for the kind words spoken about me. Clearly, the pressure is now on for me to live up to your Lordships’ expectations. I particularly thank the noble Lord, Lord Watson of Invergowrie, for his speech and for his contribution to the pre-legislative scrutiny of the Bill. The last few hours confirmed what I said at the start of the debate: your Lordships’ House is indeed a place for quiet but incisive scrutiny. Much more than that, it is a forum in which the voice of our nation’s “little platoons” can be heard. I counted more than 30 charitable organisations being represented by the speakers in this debate.

Taking a step back, it is clear to me that, thanks in very large part to those who spent so long scrutinising these proposals over many months, there is considerable support in this House for the principles that underpin the Bill and most of its measures. Let us not forget why these powers are needed. It was the independent National Audit Office that pointed to,

“gaps in the Commission’s statutory powers which were hampering its ability to regulate effectively”.

In the years since that report was written, many in the charity sector have supported the need for change, as my noble friend Lord Hodgson did again today. These powers need to be carefully balanced, as does the role of the Charity Commission, between being a regulator and an adviser, as the noble and learned Lord, Lord Hope

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of Craighead, said. Here again I pay tribute to and thank the noble and learned Lord—the Usain Bolt of charity law, as we are told to call him—for all he did in making that process so productive and worth while.

Lord Hope of Craighead: My Lords, it occurs to me that Usain Bolt suggests that we rather rushed our job. I think Mo Farah might be a better analogy.

Lord Bridges of Headley: I am brought up short. The noble and learned Lord is quite right: Mo Farah would be much better. Thanks to the noble and learned Lord’s hard work, and the work of so many others in this Chamber, I am pleased but not entirely surprised that rather than wheeling out the wrecking ball for this Bill, your Lordships have simply started to stick little pins into it before the House, to test, to probe and to clarify a little bit more. I very much welcome this, my first experience of legislative acupuncture, an experience I am told will leave me feeling invigorated, refreshed and revitalised.

Turning to address the points made, I hope to cover as many as I can, starting with some of the more detailed comments. The noble and learned Lord, Lord Hope, asked whether we could amend Clause 8 to make it clear that there are other circumstances in which a third party may be unable to comply with the Charity Commission direction. I am sympathetic to this point as we want the provisions to work effectively. We will need to look at this in some more detail before Committee, as we will other words such as “privy”, which I think the noble and learned Lord also mentioned.

My noble friend Lord Lindsay referred to the complementary role that standards and accreditation could play alongside the new powers proposed in the Bill in addressing governance and trustee issues. I agree and I welcome the work being done by the United Kingdom Accreditation Service and the NCVO to explore the potential that standards and accreditation have to offer in the charity sector.

My noble friend Lord Hodgson made a number of incisive points, as one would expect. He asked for the tribunal appeal rights to be consolidated and simplified. While recognising his point, it is important to note that not all Charity Commission decisions are subject to appeal and the existing table of appeal rights provides a useful checklist of what decisions can be appealed and who can appeal them. The Charity Tribunal itself has, I am told, not expressed concerns about it in practice. My noble friend Lord Hodgson also asked for time to implement the Law Commission’s recommendations. I am sorry to say that I cannot give any guarantees, but my noble friend knows that the Government will look favourably on deregulatory and simplification measures.

A number of comments were made about the social investment aspects of the Bill, and I am very encouraged and heartened by the interest that your Lordships paid to this. The noble Viscount, Lord Chandos, for example, made a number of perceptive points about social investment, as did the noble Baroness, Lady Kramer. I would very much like to meet with both of them to pick their brains, as they clearly have a lot of experience in this sector. I know that the noble Viscount sits on a

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number of foundations, and it is quite clear from the noble Baroness’s very eloquent speech that she, too, has a lot to offer.

My noble friend Lord Borwick made some very interesting points on the definition of social investment, including a slightly detailed point on mixed-motive investment. I will not detain the House on that point now but I would be delighted to discuss it with him, as I would with my noble friend Lord Bridgeman. As regards the naming of charities, a point which my noble friend Lord Borwick brought up, I simply point out that it is an offence to call yourself a charity if you are not; and as regards charitable income, charities must now declare income from central and local government in their accounts.

I turn to my noble friend Lord Moynihan’s remarks about independent schools, and pay tribute to the extensive and fantastic work that he has done in this area and on sports in general. He made some interesting points about the public benefit test. I would like to make it clear that charities already have to report on their public benefit in their trustees’ annual report. However, I would be happy to meet my noble friend before Committee to discuss the points that he has raised. Likewise, I would like to discuss the public benefit issue with the noble Baroness, Lady Brinton, who also brought this up in a number of ways.

Perhaps I may turn to some of the substantive points in the Bill itself. Clause 3, as noble Lords will remember, will enable the Charity Commission to take account of other relevant evidence of a person’s conduct in the context of a statutory inquiry into a charity. I think that the noble Baroness, Lady Barker, and the noble Lord, Lord Low, raised concerns about this. I would simply point to several safeguards on this point, and I shall do so quickly. First, there must be a statutory inquiry open and the Charity Commission must be satisfied that there is misconduct or mismanagement linked to the individual in that charity before it can rely on conduct from outside the charity in its decision-making. Secondly, when exercising its powers the commission must provide a statement of reasons which sets out the evidence it relied on in making the decision. This would include any evidence it relied on from outside the charity. Finally, there is a right of appeal to the Charity Tribunal in relation to the exercise of the commission’s compliance and remedial powers, ensuring judicial oversight of the exercise of the power.

The noble Baroness, Lady Barker, and the noble Lord, Lord Low, also referred to Clause 7, which contains a power to direct a charity to be wound up. As your Lordships will know, the commission’s usual practice is to restore a charity to health following an inquiry. However, in some very rare cases—and I stress they are rare—it would be more appropriate for any remaining assets to be transferred to another charity. The commission can already do that under existing powers, but now the commission will have the power needed for the shell to be wound up. This power is available only in the context of a statutory inquiry where there is misconduct or mismanagement, or risk to charity property. In addition, the commission must be satisfied that the charity does not operate, or that

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its purpose could be more effectively promoted if it were to cease to operate, and that the exercise of this power is expedient in the public interest. There is also a requirement for the commission to publish details of a proposed winding-up order and invite representations. A winding-up order can be appealed to the tribunal. So, there are a number of safeguards around that clause too.

Two points were made on Clause 9, which concerns the automatic disqualification powers that the Charity Commission is to be given. The noble Baronesses, Lady Hayter and Lady Barker, and the noble Lord, Lord Low, among others, raised this point. I am sure that we will discuss this further in Committee. As regards their wish for sex offences to be added to the list, I would simply say that there is an existing regime to ensure the suitability of anyone in a charity with unsupervised access to children and vulnerable adults. Whether they are a trustee, an employee or anyone else, they must all have had a Disclosure and Barring Service check. It would be impractical for the Bill to break down the charities type by type and prescriptively list criteria for automatic disqualification in each case. Charities should be trusted to make their own decisions on how suitable a potential trustee is when recruiting. Where charities fail to take their safeguarding responsibilities seriously, the Charity Commission can and does intervene to take regulatory action.

Baroness Hayter of Kentish Town (Lab): Does the Minister accept that that occurs only after someone has been abused?

Lord Bridges of Headley: I would point out, if I may finish my point, that under the Bill the commission would also be able to rely on the disqualification power if a person’s conduct clearly made them unfit to serve as a trustee or senior manager of a particular charity or class of charities. The commission’s draft guidance on how it would exercise the disqualification power makes clear that it could be used in the circumstances. This is made clear on page 4, under paragraph (b)(i) concerning condition F. I know that we will probably return to this point in Committee, so I hope the noble Baroness will forgive me for going on right now.

Also as regards Clause 9, the noble Baronesses, Lady Barker and Lady Brinton, and the noble and learned Lord, Lord Hope, were among a number of your Lordships who raised the issues that counterterrorism legislation might have in this context. I have been fortunate enough to talk to a number of your Lordships about this point and I recognise that there is a concern for some charities operating in some of the most difficult parts of the world—not just the Middle East, as the noble Baroness, Lady Brinton, pointed out. However, I would point out that several government departments, including the Home Office, the Treasury and DfID as well as the Charity Commission and the Cabinet Office, are engaging with NGOs to understand their concerns and ensure that, wherever possible, they are given proper guidance.

In many cases there is already detailed guidance dealing with the points that were raised, and it may be a case where better signposting is needed. We are also

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not aware of any legitimate NGO worker who has been convicted in the UK under the counterterrorism legislation. Providing some sort of exemption for charities from aspects of counterterrorism legislation may sound attractive, but I would argue that it could create a loophole in the law that could be exploited by the unscrupulous—something which I am sure we would all want to avoid. I was particularly struck by the remarks made on this point by the noble Lord, Lord Green of Deddington, given his extensive experience in this area, and I thank him for his contribution.

The noble Lord, Lord Low, raised Clause 10, particularly as regards whether condition F in the proposed new section is too broad. This condition needs to be considered in the context of other criteria for the exercise of the disqualification power, namely the test of fitness that disqualification,

“is desirable in the public interest … to protect public trust and confidence in charities”,

and the safeguards relating to the operation of the power, including the right of appeal to the Charity Tribunal. The Charity Commission’s draft guidance on how it would exercise the power should provide reassurance that it will use the power only when there is a clear case for doing so; that the commission would clearly explain what it would take into account before using the power; and that in exercising the power, the commission would provide an explanation identifying the conduct in question and why it thought that the conduct met condition F.

I turn to some of the wider issues that have been raised. The noble Baroness, Lady Hayter, and a number of other noble Lords raised the tragic case of Olive Cooke. This was a very sad case and I start by paying my condolences to the family of Olive Cooke and pay tribute to her outstanding work in the field of charity, which the noble Baroness, Lady Corston, referred to. I would like to say here that the charity sector needs to move quickly and firmly to show that self-regulation works in the best interests of the public and that fundraising can set itself sufficiently high standards to meet public expectations.

Last week, my honourable friend the Minister for Civil Society met with three chief executives of the self-regulatory bodies. He made it clear that action must be taken quickly to protect the long-term reputation of charities. The self-regulation bodies agreed to pull together a plan of action that could be taken in the short term, together with plans to work on in the longer term. The FRSB published its interim report yesterday, and its findings and recommendations are being discussed at the Institute of Fundraising’s standards committee today—a point, I think, that the noble Lord, Lord Watson of Invergowrie, was referring to. Charities need to ask for funds, but that is not an inalienable right and it needs to be exercised responsibly, particularly if we are to protect public trust and confidence in charities for the long term.

A number of your Lordships raised the issue of charity campaigning, including the noble Baronesses, Lady Hayter and Lady Pitkeathley, and the noble Lord, Lord Watson. The Government have been consistently clear that charities have the right to campaign within the law and that this can be a valuable way in which charities can further their charitable purposes.

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The Charity Commission’s guidance, CC9, makes it clear that charity law recognises that campaigning can be a legitimate activity for charities and sets out the general principles. The Charity Commission keeps all its guidance under review to ensure that it remains relevant and up to date. The commission has monitored charities’ observance of the guidance during the election campaign and is considering the findings from that monitoring along with the impact of the lobbying Act and other issues relating to the current guidance. The Charity Commission will need to take account of any findings of the statutory review of Part 2 of the transparency of lobbying Act by my noble friend Lord Hodgson of Astley Abbots. If the commission considers revisions should be made to CC9, it has committed to say so publicly and to consult widely.

I turn to housing associations, right to buy and their charitable assets. The noble Baroness, Lady Hayter, raised the Government’s policy to extend right to buy. This, of course, is being taken forward in another Bill. The Government are determined that anyone who works hard and wants to get on the property ladder should have the chance to do so. There is indeed, as the noble Baroness knows, a precedent for housing association tenants accessing discounts to enable them to buy their own home. I believe many people exercised the right to buy their housing association home between 1997 and 2010.

Finally, a number of your Lordships raised the resources and role of the Charity Commission, including the noble Lords, Lord Low and Lord Watson of Invergowrie. I would make two points. First, on its resources, if we are to bring down the deficit, we need to make savings and efficiencies right across government, and that includes the Charity Commission. The Treasury has agreed a sensible settlement for 2015-16 with the Charity Commission, based on its forecast needs and focused on protecting its investigation and enforcement functions. The 2015-16 settlement also increased the Charity Commission’s capital budget by £500,000 to invest in a new digital online system for charities to file their annual accounts. This will improve the Charity Commission’s efficiency and help it to identify and tackle fraud and mismanagement. I also welcome the £8 million investment in the Charity Commission announced last October by my right honourable friend the Prime Minister. All this will help the Charity Commission refocus its regulatory activity on proactive monitoring and enforcement in the highest risk areas, such as the abuse of charities for terrorist and other criminal purposes, such as tax avoidance and fraud. Secondly, as regards supporting charities, I am confident that the Charity Commission will get the balance right between regulator and adviser, and I was heartened to read what the National Audit Office said in its interim report.

I look forward to debating and discussing these measures, and more, in more detail with your Lordships in the weeks ahead. As I said, my door is always open. That said, I would be grateful if your Lordships do not follow the example set by my formidable great-aunt, who was general secretary of the Women’s Institute during the Second World War. I am told that when she ran into some bureaucratic obstacle, she found that the best way of overcoming it was to harry Ministers

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by ringing them at home well before breakfast. That is something that I recommend your Lordships do not follow, as you may get my four year-old daughter, who is twice as formidable as her great-great-aunt.

This Bill is just one part of the Government’s programme to strengthen the fabric of our nation—one nation. In myriad ways, in every community across the land, charities are performing that vital role. Some are tiny, others enormous—together they are a golden thread, weaving together those who want to do their bit. The Bill will give the Charity Commission strengthened powers to tackle abuse so as to maintain the public’s trust in charities, and it will enable those who have to do still more to help those who have not. I thank your Lordships for all your contributions today and for the many months spent scrutinising the Bill’s proposals. I ask the House to give the Bill a Second Reading.

Bill read a second time and committed to a Grand Committee.

Gurkhas: Anniversary

Question for Short Debate

7.46 pm

Asked by Lord Bilimoria

To ask Her Majesty’s Government what activities have taken place relating to the 200th anniversary of the Gurkhas’ service to the Crown and the Government’s support of the Gurkha Welfare Trust, particularly in the light of the recent earthquakes in Nepal.

Lord Bilimoria (CB): My Lords, yesterday I was privileged to attend the Gurkha pageant held at the Royal Hospital Chelsea, where I was proud to be a commissioner for six years.

Throughout the pageant, my eyes welled up with childhood memories of being brought up among the Gurkhas—it all came flooding back. My late father, Lieutenant-General Faridoon Bilimoria, was commissioned into the 2/5th Royal Gurkha Rifles, Frontier Force, and commanded his battalion in the 1971 war for the liberation of Bangladesh. His battalion suffered heavy losses and casualties, including officers I had known and grown up with as a child. How ironic that a couple of decades later I would found a brand, Cobra beer, which we supply to thousands of Indian restaurants in the UK, the vast majority of them run and owned by Bangladeshis.

I am on the commemoration committee of the Memorial Gates on Constitution Hill and was chairman of the committee for six years. These gates exist because of the amazing tenacity of one individual, my noble friend Lady Flather. The Memorial Gates commemorate the contribution of the 5 million volunteers from the Indian subcontinent, Africa and the Caribbean. Inscribed on the ceiling of the pavilion next to the gates are the names of the Victoria Cross and George Cross holders, three of whom were from my father’s battalion, the 2/5th Gurkhas—one posthumous.

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Gaje Ghale VC and Agansing Rai VC were living legends, who I was fortunate to have grown up with and have been inspired by for the rest of my life. Agansing Rai VC was subedar-major when my father was commanding his battalion. Legend has it that when my father, as a young captain in a remote area in north-east India, received the telegram of my birth, Gaje Ghale was next to him and jumped for joy. The ground shook, because he was such a large man.

What I learned about the Gurkhas really quickly is that they are the kindest, most caring and most gentle people. For example, when I took my South African possible future wife on her first visit to India, my father’s retired driver, Bombahadur, who continued to serve with my father at retirement, took me aside and said, “Baba, you should marry her!”. My father’s beloved Gurkha had given his approval, and of course then there was no question but that I was marrying Heather.

However, these kind gentle people in peacetime are the fiercest warriors mankind has known. Just reading the citations of the Gurkha VCs makes your jaw drop with feats that are, quite frankly, superhuman. Sir Ralph Turner, a former officer of the 3rd Gurkhas, had written:

“Bravest of the brave, most generous of the generous, never had country more faithful friends than you”.

We are celebrating the Battle of Waterloo and the 200th anniversary of the Gurkhas’ service in the same year. I visited the site of the Battle of Waterloo earlier this year. If the Duke of Wellington had had Gurkhas among his troops, the Battle of Waterloo would not have been won on the playing fields of Eton or because Blücher came to the rescue; it would have been won because Napoleon’s troops, including his beloved Imperial Guard, would have been running in fear back towards Paris, fleeing from the fierce Gurkhas, just as the Argentinians did in the Falklands.

It was disheartening when I first spoke about the Gurkhas in this House in 2008 to start the fight for the Gurkhas who had served in Britain for four years to have the right to stay on in the UK if they wished to do so. It seems so unfair that a person could work for a company for four years and have the right to stay indefinitely, and yet someone who was willing to commit the ultimate sacrifice was not, at that time, allowed to. After that debate—I thank the noble Lord, Lord Lee, who initiated the Bill—Joanna Lumley, whose father had served in the 6th Gurkhas, came to the fore and spearheaded a public battle that generated an outcry among the British public, who were overwhelmingly appalled at this injustice and unfairness. I will never forget in one television interview how Joanna Lumley humiliated the then Home Office Minister, Phil Woolas. Of course, we won the day and justice was delivered.

We should never take for granted what these amazing men have done in the past 200 years for Britain and India. I have been very outspoken in my criticism of the SDSR in 2010, when cuts were made to the Army that I believe were negligent, cutting the number of Army troops to 80,000—not even enough to fill Wembley Stadium. Today, there are barely 3,000 Gurkhas in the British Army, with the Gurkha regiments amalgamated into one, the Royal Gurkha Rifles, with just two battalions,

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and some in the Queen’s Gurkha Signals, the Queen’s Gurkha Engineers and the Queen’s Own Gurkha Logistic Regiment.

However, in India, the Gurkha regiments left with the Indian army after India’s independence have flourished, with six battalions per regiment, an additional regiment formed—the 11th Gurkhas—and Gurkhas serving in all other arms of the army as well. There are approaching 100,000 Gurkhas serving in the Indian army, recruited from Nepal and India, who, after they retire, settle in both India and Nepal. They are a vital backbone of the Indian army. Will the Minister agree that the 200th anniversary celebrations of the Gurkhas are for the British and for India? It was a privilege today to show General Dalbir Singh Suhag, Chief of the Army Staff of the Indian army, around Parliament—all the more for me because he is also from the 5th Gurkhas. When my father was commander-in-chief of the central Indian army, an army of 350,000 strong, I always felt it meant more to him to be president of the Brigade of Gurkhas and colonel of his regiment.

Could the Minister commit, where the Prime Minister is unwilling to in this dangerous world that we live in, to the NATO commitment of 2% of GDP spent on defence? Could the Minister also reassure us and confirm that there will be no further cuts to the Gurkhas? I look forward to the forthcoming SDSR report and hope that this time it is not about means before ends but about looking carefully at the needs first. It is our duty to look after the veterans, and I commend the work of the Gurkha Welfare Trust and all that it does for Gurkhas to live out their lives with dignity. Can the Minister confirm the commitment for future support of the Gurkha Welfare Trust to continue the wonderful work that it does? Will the Government reassure us?

His Royal Highness the Prince of Wales, who was present at the pageant, said:

“The Brigade of Gurkhas is more than just a fighting force, it is also—in every sense of the word—a family”.

Particularly at this time, with the devastating earthquakes by which so many Gurkhas have been affected so tragically, does the noble Earl feel that we are doing enough to support the Gurkhas in Nepal? Will the Minister confirm that? Our thoughts and prayers go out to all those affected in the two disastrous, tragic earthquakes. Major-General Ashok Mehta, my father’s second-in-command, said:

“Two hundred years of distinguished soldiering have put a halo around the Gorkha in the hall of fame. In this hour of national calamity it is the Gorkha-ness of the Nepalis that will be the greatest enabler to confront the monumental tragedy”.

In my own company, Cobra Beer, I sent out 200 letters to our Nepalese restaurant customers straight after the first earthquake to offer our support to raise funds, and I am delighted to say the restaurants have raised almost £200,000. That is the wonderful spirit of giving in our country.

A fellow Zoroastrian Parsee, Field Marshal Sam Manekshaw—popularly nicknamed by the Gurkhas as “Sam Bahadur”—said:

“If a man says he is not afraid of dying he is either lying or is a Gurkha”.

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Prince Harry, who was also present at the pageant yesterday, said that,

“there was no safer place than by the side of a Gurkha”.

This is the Ayo Gorkhali, or “Here come the Gurkhas”, the cry of the Gurkhas—the finest fighting force the world has ever known. The Gurkha motto is:

“It is better to die than be a coward”.

On the 150th anniversary of the regiment of the 5th Gurkhas in 2008, which took place at Sandhurst—I am proud to be a member of the regimental association— I heard a prayer written by the Reverend Guy Cornwall-Jones, whose father served in the 5th Gurkhas. That prayer said:

“Oh God, who in the Gurkhas has given us a people exceptional in courage and devotion, resplendent in their cheerfulness, we who owe them so much ask your special blessing on them, their families and their land. Grant us thy grace to be faithful to them as they have been faithful to others”.

As a nation, we can never thank the Gurkhas enough. We will be eternally grateful to them.

7.54 pm

Lord Sheikh (Con): My Lords, I am pleased to participate in this important debate and thank the noble Lord, Lord Bilimoria, for bringing it before your Lordships’ House.

I have always been a strong supporter of the Gurkhas. I have an extremely high regard for their loyalty and dedication to the British Army. I also hold a great fondness for the Gurkhas’ original home, Nepal. I am a member of the All-Party Parliamentary Britain-Nepal Group and in fact met the acting high commissioner for Nepal last Friday. I have visited Nepal twice, first as part of a parliamentary delegation and secondly to set up a school of excellence for business students in Kathmandu. The parliamentary delegation visited Pokhara, the centre of recruitment for Gurkhas. We also visited the historic Gurkha Memorial Museum there. I was privileged to meet members of the Nepalese royal family with the noble Earl, Lord Sandwich. We were treated to a most enjoyable evening. I was also presented with a real Gurkha kukri. I have previously worked with Nepal’s ambassador to the UK to support a trade delegation to the country.

Each time I visited Nepal, I found the people to be extremely friendly and hospitable. For me, the integrity of Nepalese culture and that of its Gurkha soldiers go hand in hand. The Gurkhas have been part of the British Army for 200 years. They fought loyally for our country all over the world and still continue to do so. They served alongside us in places such as Burma, Malaysia, Cyprus, the Falklands and China. More recently they played key roles in the Balkans, Sierra Leone, Iraq and Afghanistan. They made significant contributions during both the First and Second World Wars. Some 43,000 Gurkhas lost their lives during these two wars. They are noted and respected for their courage and valour in battle, having won 13 Victoria Crosses. The spirit of their service is demonstrated in the motto,

“better to die than live a coward”—

a point made by the noble Lord, Lord Bilimoria. When Prince Harry returned from his tour of Afghanistan, he said that there was,

“no safer place than by the side of a Gurkha”.

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Today, they are still an integral and invaluable part of the British Army. Gurkhas within the British Army are proof that different religious and ethnic groups can work together. I find this very pleasing as I am actively involved in encouraging the BME communities, particularly Muslims, to join the Armed Forces. Admission to the Brigade of Gurkhas is highly competitive. There are often more than 20,000 applications for the 230 places available each year. The brigade is 3,640 strong.

Of course, the Gurkhas’ loyalty and integrity of service is not constrained to warfare. They also command respect away from the battlefield, undertaking wider military duties with the same discipline and vigour. We need look only at the recent invaluable contributions made by the Gurkhas following the Nepalese earthquake. The devastation caused by this disaster required enormous support from the international community. The United Kingdom’s humanitarian response has been most impressive. I commend both the Ministry of Defence and the Department for International Development for their financial commitments and for spearheading much of the wider relief effort. A large number of British Army Gurkha engineers were deployed to provide direct welfare support to serving Gurkhas, their families and veterans who were affected. They are constructing shelters and assisting in the repair of infrastructure.

In the long term, it is of course not only emergency help that will be required; also there will be the necessity to build communities and businesses. It is estimated that the Nepalese economy has suffered dramatically. Initial estimates put the cost of damage to property and infrastructure at $6 billion to $8 billion. Combined with an inevitable wider economic downturn, the total cost of the earthquake could be up to $10 billion. This is more than half of the country’s GDP last year.

Last week, I said in your Lordships’ House that Muslim charities are undertaking sterling humanitarian work in different parts of the world. I would like to mention that I am connected with the Al-Khair Foundation, which was founded by Imam Qasim. It has worked tirelessly in Nepal to help the earthquake victims, raising nearly £1 million from donors in the UK and securing over £5 million of medicines from its supporters in the United States. The Muslim community has responded positively to render help to all the people of Nepal. DfID has now pledged an additional £10 million to rebuild health services. Our total commitment of £33 million makes us the largest donor to the relief operation. I hope that we can continue to commit this level of support.

It is clear that Gurkhas hold a special place in the hearts of the British people. It is therefore important that we appropriately honour and celebrate their contributions on this anniversary. I am pleased to see that such an extensive series of events have taken place and are going to take place, not least the magnificent Gurkha 200 pageant that took place yesterday at the Royal Hospital Chelsea. It is so good to see a string of concerts, exhibitions, sporting events and even physical challenges organised as part of the commemorations.

Commemorating the past sacrifices of Gurkhas is one thing. It is also of paramount importance that we treat the Gurkha soldiers and veterans of today with the respect they deserve. At the very least, we must

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afford them parity with other British soldiers. Many Gurkhas are now based here in the United Kingdom and settled here following completion of service. I believe this must be taken into account when considering matters such as pension entitlements. I am glad that the right to settle in Britain has now been extended to all Gurkhas, irrespective of when they retired. I spoke on that matter when it was discussed in your Lordships’ House several years ago. I commend the All-Party Parliamentary Group on Gurkha Welfare for its tireless work on behalf of Gurkha veterans. Its inquiry last year ensured that veterans’ grievances were given appropriate attention.

I finish my remarks by expressing my own gratitude to the Gurkhas, and I am sure that that feeling is shared across the House and the country.

8.04 pm

Lord Davies of Stamford (Lab): My Lords, I congratulate the noble Lord, Lord Bilimoria, on securing this debate, which is an exceptionally well-timed initiative, if I may say so, given that this is the 200th anniversary of the first Gurkha units being recruited by the East India Company and there is the appalling coincidence of the dreadful earthquake from which people in Nepal are suffering so much at present.

I speak both as a former Defence Minister and as someone who knows and loves Nepal, as evidently the noble Lord, Lord Sheikh, does. Of course, I was not a Minister for the Armed Forces—I was Minister for Defence Procurement—but no one can be associated with the British Armed Forces without being enormously conscious of the tremendous contribution that the Gurkhas have made to the defence of this country and our people, and to the defence of world peace over the time when Gurkha units have been with the British Army.

I add to the very fine tribute, which the noble Lord, Lord Bilimoria, has just paid to the Gurkhas’ extraordinary bravery and gallantry and which was not exaggerated in any way, the fact that, to my knowledge, they have never actually participated in an operation which they have not concluded not merely honourably but with the greatest distinction. They are an enormous asset. I do not think that I need to expand on that too much, because I note that two noble Lords are going to contribute to this debate—the noble Viscount, Lord Slim, and the noble Lord, Lord Ramsbotham —who probably have direct experience of fighting alongside Gurkhas or perhaps commanding formations, including Gurkha units, which I of course do not have. I think there is a very wide recognition in this country of the great debt that we owe the Gurkhas, which was demonstrated very visibly, and I think quite movingly, by the success of Joanna Lumley’s campaign. I hope that it moved people in Nepal, too. I think that it did.

Nepal is a country that I know personally. I spent several weeks of my life on different occasions walking in Nepal, both in the east of Nepal, going up to the Everest base camp, the Cho La glacier and elsewhere, and in the west of Nepal, going up to Annapurna base camp and so forth. Anybody who does that is entirely dependent for his security and safety on the good judgment and conscientiousness of his guide. On several occasions, I could understand some of the great confidence that British soldiers have always had in having Gurkhas

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alongside them—confidence in their courage and confidence in their reliability, judgment and great personal loyalty.

What is happening at the present time is a terrible tragedy. The whole world has responded. The Indians and Chinese have particular political as well as geopolitical reasons, but I am sure that they also have very strong humanitarian reasons, for getting involved in helping Nepal. We have a deep and personal historic obligation to do that, as well as a moral one. The Government have responded to that, and I commend DfID for what it has done so far, but I want to ask the Minister a few questions which I think it would be useful to the public interest to have answered in public this afternoon.

First, one hears in the media that the problem is not so much lack of money, because quite a lot of money has been raised from different sources; the problem is one of logistics and co-ordination of the different government departments in Nepal. Could the noble Earl, Lord Howe, say whether that is a correct perception of the present situation? It would also be very valuable if he could give us an update on what the contribution has been from this country. I also wonder to what extent British military personnel have been involved. When I was in the MoD, one thing that I did was to order 22 Chinooks, 10 of which were cancelled by the incoming Government in 2010. We still have 60 in inventory, and just half a dozen of those would be a wonderful asset, particularly in supplying those very narrow valleys, which are otherwise inaccessible. Everything has to be carried in on the back of a man or a yak, often after a trek of days. Chinooks would be wonderful in getting heavier building materials up into those valleys in time to repair or rebuild houses before the winter comes.

On the heritage sites in Nepal that have been so badly damaged, we have all been appalled to see pictures of Durbar Square, which has been almost completely obliterated. As anybody knows who has been to Kathmandu, it is the most extraordinary collection of the most exotic and astonishing Nepalese architecture, going back over 400 years. There are other great sites of the same kind—at Bagan, for example. What is the situation with regard to repairing those, and to what extent are the Government involved in initiatives with UNESCO or otherwise to make sure that something is done to repair them? Somebody has already mentioned the very fine museum in Pokhara, which is both a brigade and a regimental museum. I would be very interested to know whether that has survived unscathed, and if not what is being done to repair it.

Finally, perhaps I could ask a question that is also a suggestion. Has there been a ministerial visit to Nepal since this disaster took place? If not, is one contemplated? If one is not, could one please be contemplated as urgently as possible? For the reasons I have already mentioned, I think it would be particularly effective if it could be a Defence Minister who goes to Nepal, who could show directly by his or her presence there our solidarity with the Nepalese people and would be able to form a personal judgment on the progress of the great international relief effort and come back and be able in a well-informed fashion to take any measures that might be needed in the present circumstances to improve things and make sure that we do not have any

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further tragedies of people dying because, for example, they cannot repair their houses before the weather deteriorates in the autumn.

8.10 pm

Lord Burnett (LD): My Lords, I, too, congratulate the noble Lord, Lord Bilimoria, on securing this debate. It is a privilege to speak in it and pay tribute to the Gurkhas and their families who have served this country with such dignity, loyalty, courage and steadfastness for 200 years. I first came across the Gurkhas professionally in 1965. My first draft after completing commando training was to 42 Commando Royal Marines, which was stationed in the Far East. On arrival, and before deployment on operations, my commanding officer sent me to do the jungle warfare course at Kota Tinggi in Malaya. The jungle warfare school was effectively run by the Gurkhas. The commanding officer and many of the directing staff were Gurkhas. The demonstration company was drawn from a Gurkha battalion. The course was excellent and I had many opportunities to see at first hand the expertise of the Gurkhas in warfare and, in particular, in jungle warfare. I also served with the 2nd Battalion of the 2nd Goorkhas for a few weeks in the advanced party of my unit when we took over the Lundu area of Borneo from them. That also gave me a first-hand opportunity to see Gurkha fighting men in action. Their expertise has been acquired over centuries during which Gurkhas have fought with the greatest bravery, skill and stamina.

I understand that there is now a Gurkha battalion stationed in Brunei. Will the Minister confirm that that Gurkha battalion will be staying there and explain to the House the vital role the Gurkhas still play in training other branches of the Armed Forces in jungle warfare? Jungle warfare is a difficult skill, and it is crucial that the United Kingdom Armed Forces retain it.

During the jungle warfare course, we were given a lecture on the glorious history of the Gurkhas: 25 Victoria Crosses have been awarded to Gurkhas. Lance Corporal Rambahadur Limbu had not yet won his Victoria Cross. I believe he won it in action in Borneo on 21 November 1965 for utmost bravery.

From an excellent article by Hew Strachan in yesterday’s Daily Telegraph, I learnt that 90,000 Gurkhas served this country in the First World War and that 138,000 Gurkhas served this country in the Second World War. I understand that service in the British Army is popular with Gurkhas. There is a considerable shortage of recruits coming forward within the United Kingdom to join the Army at present. Now is not the time to go into the considerable shortcomings in army recruiting, but will the Minister explain to the House whether the Government are considering recruiting more Gurkha battalions?

The recent earthquakes in Nepal have had tragic consequences for that country. It is fortunate that we were able to deploy Gurkhas to assist and support their own people. The Armed Forces in this country, which include the Gurkhas, have to be flexible. They have to be ready and able to conduct all varieties of operations: from all-out warfare to humanitarian operations. Our Armed Forces are, and always have been, our greatest

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ambassadors. They are the most effective providers of humanitarian aid. Nevertheless, the commitment to spend 2% of our gross domestic product on defence should stand alone and not be diluted with the budget of any other department of state.

The fighting ability and bravery of the Gurkhas are legendary. They will always hasten to the battle and prevail. They are fearsome in close-quarter combat, they are loyal and they are true. We owe the Gurkhas loyalty in return. I hope that the Minister will be able to convince this House tonight that the Government understand this and will always support and stand by our Gurkha brothers-in-arms, their families and the people of Nepal.

8.15 pm

Viscount Slim (CB): My Lords, I thank the noble Lord, Lord Bilimoria, for the chance of a debate about Nepal and the Gurkhas. He mentioned that he particularly wished to raise the issue of the Gurkha Welfare Trust. Noble Lords have done that. One thing should be known at the start, which is that the Chancellor of the Exchequer has been extremely good to a number of military charities, and the Gurkha Brigade has done well by them.

The amount of money required to put Nepal straight is very great. One or two noble Lords have said that the Government must tell us exactly what is happening. I am rather sad that there has not been a general call within the country to get volunteers from the many Gurkhas who live here. Apparently there are a lot of unemployed Gurkhas around Aldershot and other places, and I would have thought they could be got together to volunteer for some form of pioneer company to go out to Nepal and do some work to help put the place straight.

Politically, we want to be very careful. China is not being pleasant to the Tibetans, and I have a feeling that Nepal is in their sights, long term, as well. As the noble Lord, Lord Davies of Stamford, said, it is about time some of the British Government got out to Nepal to assess the situation and make some firm judgments about how we can stand by Nepal and help it.

Noble Lords have heard about the Gurkhas’ courage. I speak as one who was a Gurkha. I had to work very hard to have the same courage. The Gurkha is also very generous about other people who are brave. In the great old Indian Army, it was not just Gurkhas. The great martial tribes of India, which still join its Army, be they Rajputs, Punjabi Musulmans or Maratha —you can go on—all have great histories of courage. The Gurkha is generous. He is even generous to a brave enemy. We all hated the Japanese, who were not a pleasant enemy, but no one is rude about the courage—the vicious courage—of a Japanese solider. The Gurkha would pay due tribute to his enemy.

I feel that the Government are not doing sufficient at the moment to really get to grips with the situation. Like the noble Lord, Lord Davies of Stamford, I was very suspicious over that Chinook incident. There was something funny about it—maybe the Maoist Government and the Russians. A number of people I have spoken to who have been bravely rescued said that it was by Russian helicopters and Russian pilots.

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I think something is going on in Nepal. It is not well administered. After this awful earthquake, people have been putting their hands in their pockets and giving money that should go towards relief and that sort of thing. The trust also has its problems: veterans’ houses destroyed while medical centres, hospitals and old people’s homes put up by the trust have all disappeared. The British Government should take some interest in this.

Not only is the Gurkha brave but he is very flexible, inquisitive and not stupid. If I may just tell noble Lords a lovely little story from before World War II, some recruits had come down from the hills and, as their training and induction took place, they started to be educated. For the first time in their lives, they were suddenly shown a thing called a book and told, “If you read one of these, you will learn many things”. A recruit picked one up, looked at it and twisted it around. He said to the instructor, “I don’t quite understand about this book but you tell me one day I’m going to do this thing—‘read’ it. I’ve opened it and I want to know, do I read the white or the black?”. I call that rather intelligent questioning, when you look at the situation.

There is none better to be with than a Gurkha. Training and fighting is a pretty serious business but, take it from me, it is fun being with the Gurkhas. Please also take it from my father who, at a place called Sari Bair in Gallipoli, first met the Indian Army—a brigade of three or four Gurkha regiments and King George’s Own Sikhs, with Punjabi, Musulman and Sikh gunners all fighting as one. They got higher up the ridge—they could see over it at one point—than any other British, Australian, New Zealand or French unit. They were decimated. In my father’s own platoon of the Warwickshire Regiment, of about 40 men, 27 were killed and everyone else wounded except for two. He himself was severely wounded but he always said, “If I can get through this, I want to transfer to the Indian Army and be a Gurkha”. I can tell noble Lords that his son felt much the same in World War II.

8.23 pm

Lord Ramsbotham (CB): My Lords, as the noble Lord, Lord Burnett, has said, it is a great privilege to take part in this debate. I thank the noble Lord, Lord Bilimoria, for obtaining it on this important anniversary.

Like the noble Lord, Lord Burnett, I completed a jungle warfare course in Kota Tinggi in 1965. I was fortunate to have the 6th Gurkhas beside me in Borneo. We used to keep Gurkha rations there so that platoons could come along the border ridge and into our base, and we could go to theirs. I shall always remember seeing a platoon going out of my base. The Gurkha sergeant in charge tapped his pack and said, “Gurkha rations”. Then he patted the magazine of his rifle and said, “Indonesian rations”, and with a grin he went out of the gate.

My own regiment, The Rifles, has been very close to the Gurkhas throughout its history. Indeed, it is a great pleasure to us that the Gurkhas wear the green and black buttons of The Rifles. For years, until the Royal Gurkha Rifles itself was formed, the two Queen’s Gurkha orderly officers who become her ADCs for a

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year used to be based with us at Winchester. That was a great link. It is very important to remember that this relationship with the Gurkhas carries many links with many regiments over many years.

I am very glad that the noble Lord, Lord Bilimoria, also mentioned the Indian connection. When I was adjutant-general I was privileged to go out to Nepal to do, among other things, something that has remained in my memory for ever: I took the attestation parade early in the morning in Pokhara. With the Himalayas behind them, these young Gurkhas came forward, put their hands on a Union Jack on a table and looked me in the eye as they took the oath. That was something tremendous; it has stayed with them and with me.

At that time we were concerned because we had closed our British military hospital in Dharan. I was therefore trying to negotiate with the Indians that our Gurkhas, on retirement to Nepal, could qualify to get medical support from the Indian Army, which had arrangements in Nepal; it meant buying into an insurance policy. The whole question of the employment of the Nepalese soldier, the Gurkha, was a tripartite agreement between Nepal, India and this country, and woe betide us if we ever forget that there are three employers of these wonderful people. All three benefit from them and have done so for a long time.

I am very glad that there was the event yesterday, which I did not attend. At least it gave the public an opportunity to recognise the support and help that the Gurkhas have given us. It reminded me of an experience during the Falklands War, when the Gurkhas came back from there, having had a miserable journey in the “Queen Elizabeth”—they did not like being on the sea. They were picked up and taken by train to Aldershot, and then they got out and marched to their barracks at Crookham. The streets were lined with people cheering them. Suddenly these people, who had been looking rather sad and down in the mouth, started beaming. Immediately there was good will and good spirit, and it lifted them. The British public ought to be given opportunities to show something back to the Gurkhas.

I am very glad that the contribution to aid in Nepal has been given but I for one have questioned why, immediately after the earthquake happened, the whole of the Brigade of Gurkhas was not flown out at once to Nepal, with all its troops, signallers, engineers and logistics people. That should have been the instant reaction in return for all the wonderful help that the Gurkhas have given to this country over so long. Anything less than full commitment to them is less than generous in return for what we have had.

Yes, I am pleased that the Gurkha Welfare Trust is remembered at the same time, and I am pleased that we should go on thinking about the future of the Gurkhas who retire here, but let us never forget that for 200 years we have had marvellous, brave, loyal and selfless service from some wonderful people, and we should be eternally grateful for what we have had.

8.29 pm

Baroness Flather (CB): My Lords, I join other noble Lords in thanking the noble Lord, Lord Bilimoria, for getting this debate. I appreciate this opportunity to say something from my own point of view.

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First of all, we have spoken about the earthquake, but it is a real tragedy for Nepal and for Gurkhas, and we have not taken it as seriously as we should have because of our connection with the Gurkhas. I hope noble Lords know that Gurkhas are only a part of Nepal; not all Nepalis are Gurkhas—they are from a section of that country. I cannot say that I have ever served with any Gurkhas or been in the Army, as noble Lords can imagine. However, I will start by telling noble Lords something about the history of the Gurkhas before they came to serve with the British and with the Indians—that was the same thing at that time.

Groups of Gurkhas used to come to a place called Lahore. Anyone who has read Kim will know that Lahore was the crossroads for many parts of that world at the time, and people used to congregate there for all sorts of reasons—and not always very good ones. They used to come in groups of 10, 20, 40 or 50 to be hired by any warlords who needed somebody to fight for them. Therefore, in a funny sort of way they were doing that long before the British started having Gurkhas in their Armed Forces. A very clever British person must have seen the opportunity at that time to get all the Gurkhas together and to get them into the East India Company’s sepoys. Therefore, there is an interesting history. Originally they were known as “Lahures”—from Lahore. As I come from Lahore, I feel very proud of that.

That is how they started, but how have they gone on? They have gone on to serve Britain, and now Britain and India. I was very upset at the time when there were reductions in general in the British Army. More Gurkhas were laid off in proportion than the indigenous soldiers—British soldiers—which was upsetting in itself. Nepal is a very poor country. Nepalis need their soldiers to earn money and send it back, and as a country it is very dependent on the people who serve in the Indian army, in the British Army, and we should never forget that. They do not serve just out of niceness—“Oh, we like the British”. They need the money—they need to be fighting for the British—and they need us as much as we need them. However, we are not standing by them. They are being reduced in numbers, and there are some wicked rumours going round that the intention is to reduce their numbers further. We should take a step back and think about what they have done for the British Empire and decide whether that is fair—not just what they did for the empire but after; even after India and Pakistan.

But Nepal was never a colony, and that was a problem for us with regard to the memorial gates. Originally I had not intended to include Nepal, because it seemed wrong to have a non-colony along with the colonies. However, then somebody suggested, “Why don’t you put ‘Kingdom of Nepal’?”, so we did that. When the kingdom fell some clever ambassador said, “You have to take that off now!”, as if you can rub off something that has been engraved into stone. Therefore it reads “Kingdom of Nepal”, and it will always be like that on the memorial gates. The other thing is that when you look at the names of the Victoria Cross and George Cross recipients in the pavilion next to the memorial, you see how many names of Gurkhas are there. People who have shown such bravery and

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commitment should be treated with much more respect—although it is about not only respect but consideration, with regard to keeping them on and how their lives are.

We have heard that they can settle in this country—one or two noble Lords said that. Do those noble Lords know what the criteria are? They are so strict and difficult that the campaigners have decided that probably only 100 Gurkhas will meet them and be able to settle in this country. That is quite upsetting after all the lives they gave and all the fighting they did. I will quote the criteria, because noble Lords will probably not know them. The first one is:

“Close family in the UK”.

That seems very unlikely, does it not? The second is:

“A bravery award of level one to three”.

That may be possible. The third is “Service of 20 years”—yes; or, finally, “Chronic or long-term” illness. Are they really likely to have close family ties here? I would have thought that very unlikely. Therefore, there are issues that still need to be looked at.

Some years ago, I think at the end of the 1990s, there was a big discussion about pensions, and we were told then that it was a tripartite agreement—the noble Lord, Lord Ramsbotham, mentioned that—and nothing could be changed. However, I say, “Then negotiate with the third party as well”. You cannot just say, “We can’t do it”. I do not believe in “we can’t do it”. When I started on the rather foolish journey towards the memorial, almost everybody said to me, “You can’t do it”. Well, it is there and I have had a lot of help. The noble Viscount, Lord Slim, was a trustee; my noble friend Lord Bilimoria was chairman of the council for several years; and my noble friend Lord Ramsbotham represents somebody—I hope I will be forgiven for forgetting who it is—at the ceremony. So it is there and I hope that it will stay as a reminder of all the people who have been instrumental in helping this country. Indeed, in the Second World War, it was crucial that the colonies were able to support Britain in its hour of need, as one might call it.

The key things now are, first, to decide whether the Gurkhas mean enough to keep them on and not reduce their numbers any further and, secondly, to do whatever we can to help them following the earthquake. It is unbelievable that there have been not one but several earthquakes, and the terrain is difficult. I hope that the noble Earl will tell us that the Government are going to do more and that somebody senior will visit Nepal. That would mean a lot for morale. I have been to the two camps—the British and the Indian—in Nepal. We were able to spend time at both camps and it was very interesting.

That is about all that I can tell your Lordships about my connection with the Gurkhas, but I finish with a short iconic story, although I am sure it is untrue. Somebody said that the Gurkhas were asked to jump into a pool of water. They could not swim but when they jumped into the water they swam. I do not believe it but it is a nice story.

8.39 pm

Lord Rosser (Lab): I, like other noble Lords who have spoken, extend my congratulations to the noble Lord, Lord Bilimoria, on securing this very timely

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debate. He spoke with the passion and fervour that we have come to associate with him. I regret that my contribution cannot contain personal experiences and recollections but this debate gives an opportunity to draw attention to the major contribution made by the Gurkhas to the British Army and to talk about some current-day issues relating to the Gurkhas, including Gurkha veterans.

As we all know, this year marks 200 years since Gurkhas were first enlisted into the armies of the British Crown in the wake of the Anglo-Nepalese war at that time. Ever since then, the Gurkhas have made a major and widely admired and respected contribution to the British Army, and many have made the ultimate sacrifice and given their lives. Thirteen Gurkha soldiers have won the Victoria Cross.

As the noble Lord, Lord Burnett, said, during the First World War more than 90,000 Gurkhas served the British Crown, of whom more than 20,000 were killed, wounded or missing in action. Gurkha regiments earned hundreds of gallantry awards throughout that war. In the Second World War more than 137,000 Gurkhas served the British Crown, with more than 23,000 being killed, wounded or missing in action and more than 2,500 awards for bravery being made.

More recently, the Gurkhas have served in the Falklands, Kosovo, Bosnia, East Timor, Sierra Leone, Afghanistan and Iraq. Today the Brigade of Gurkhas has spread between the British garrison in Brunei and the UK, and they continue to play a full part in the Army’s operational and peacetime commitments.

The Gurkha soldier, it has been said, defines the close relationship between the Republic of Nepal and the United Kingdom—a relationship that has developed in many different and perhaps surprising ways. Aldershot Town Football Club, whose ground is close to Aldershot Garrison, sent a team to play in Nepal earlier this year and has established a fund to aid the Nepal earthquake relief programme. Last year it was adopted as the official football club of Rushmoor’s Nepalese community, and last month the Nepalese organisation, Sahara UK, purchased £10,000-worth of the football club’s shares. Yesterday evening there was an anniversary pageant for the Gurkhas at the Royal Hospital Chelsea, attended by the Queen, the Duke of Edinburgh and other members of the Royal Family, and, as I understand it, the noble Lord, Lord Bilimoria.

The wording of our debate makes reference to the recent earthquakes in Nepal, the first of which was on 25 April, when a magnitude 7.8 earthquake struck an area between Kathmandu and Pokhara in Nepal, and right in the centre of one of the Gurkhas’ recruiting areas, in which a not inconsiderable number of retired soldiers would have been living. Some of the villages occupied by the Gurungs, the clan which provides the backbone of the Gurkha regiments, were largely destroyed. Clearly the magnitude of the disaster in Nepal has thrown something of a shadow over the events and activities celebrating the 200th anniversary.

Needless to say, though, the Gurkhas have been playing a significant part in the relief effort, and not least through the work of Army Gurkha engineers. Points have already been made and questions asked in this debate about the Government’s approach and

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contribution to the relief effort in Nepal, to which no doubt the Minister will be responding. It is of course not only in Nepal that the Gurkhas provide humanitarian relief; they were also sent to Sierra Leone to help contain Ebola.

Competition to become a British Gurkha recruit is strong and the tests involved are very challenging. Typically some 6,000 men, now from across Nepal, will apply to be one of the 200 to 300 recruits chosen each year. Those selected become, after a year’s induction training, soldiers in the Brigade of Gurkhas, which comprises about 3% of the British Army.

An agreement signed between the UK and Nepal in 1947 provided the basis for the service of the Gurkhas in the British Army, who previously had been part of the British Indian Army before Indian independence in 1947. The Gurkha pension scheme had its origins in this 1947 agreement. The agreement committed the British Government to treat Gurkhas fairly but did mean that, before April 2007, Gurkhas served on different terms and conditions of service from those in other parts of the Army. These differences have been the cause of grievances held by members of the Gurkha veterans’ community, mainly but not exclusively in respect of perceived pension inequalities, and were the subject of a recent inquiry by the All-Party Group on Gurkha Welfare.

Many former Gurkhas now work with charities, including the Gurkha Welfare Trust. The Gurkha Welfare Trust was founded in 1969 with the aim of relieving poverty and distress among ex-Gurkha soldiers and their dependants, though today, from a network of centres across the country, it also delivers community aid such as water supply systems, schools, medical camps and welfare, not least to some of the poorest, most inaccessible parts of Nepal. The trust pays pensions from a charitable fund to which the British public contribute generously. Over 6,500 veterans or their widows depend on the welfare pension to enable them to live with dignity.

Modern terms of service for Gurkhas are now identical to British ones. Since April 2007, any Gurkha joining the British Army receives the same pay and pension benefits as their counterparts in the wider British Army. They serve on the same basis as the remainder of the Army, with some limited exceptions designed to meet the wishes of the Government of Nepal. In 2009, retired Gurkhas were given the right to settle in Britain with British citizenship, although I note the points made by the noble Baroness, Lady Flather, on that issue. The Government provide financial support to the Gurkha Welfare Trust through an annual grant in aid. However, welfare payments to needy veterans are funded by public donations.

Following the recent report by the all-party group into grievances held by members of the Gurkha veterans’ community, the Government agreed to set up a fund to compensate those who had had to leave the Gurkhas as a direct result of marrying a non-Nepalese. Over the next five years, £5 million will also be made available from LIBOR fines to support Gurkha Welfare Trust projects in Nepal or the UK, and just under £1 million has been found from the LIBOR-funded veterans’ accommodation fund to provide 32 homes in the UK for up to 64 Gurkha veterans and their spouses or

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partners. These moves by the Government will not fully address the grievances of members of the Gurkha veterans’ community, which successive Governments have faced, but they do represent further steps following the significant decisions by the then Government in 2007 and 2009 in respect of pay and pension benefits and settling in Britain with British citizenship.

In February this year, I asked the then Government if they agreed that the best way to mark the 200th anniversary would be to ensure a clear and continuing role for the Gurkhas in Army 2020 and inquired whether that was the Government’s objective and what that role might be. Now that we have a new Government, I, like the noble Lord, Lord Bilimoria, ask the question again. I hope that the Minister will provide a clear and positive answer when he responds. In particular, will he confirm that the Prime Minister’s pledge to maintain the current size of the Regular Army applies also to the Gurkhas? It would, after all, seem rather odd for us to be rightly praising the tremendous and courageous contribution of the Gurkhas tonight—I am assuming that the Minister will also be doing just that very shortly—if earlier in the day, metaphorically speaking, Ministers in the Ministry of Defence had been considering making defence cuts at the expense of the Gurkhas, as part of the somewhat secretive current strategic defence and security review.

8.48 pm

The Minister of State, Ministry of Defence (Earl Howe) (Con): My Lords, like so many people across the country and on all sides of this House, I have a huge admiration and respect for the Gurkhas. As has been said by all speakers, for 200 years Gurkhas have fought loyally for this country and they rightly deserve their reputation as being among the bravest and most fearless of soldiers. Gurkhas hold a special place in the heart of the British people, and evidence of this can be seen in the generous support given by the British public following the recent devastating earthquake in Nepal.

Before I speak about that disaster, I would like to emphasise the Gurkhas’ primary role, that of soldiers. The Brigade of Gurkhas remains a vital part of the British Army’s military capability. The noble Lord, Lord Rosser, summarised very well their role in our history. Both battalions of the Royal Gurkha Rifles and subunits of the three main corps units all deployed on operations in Afghanistan under Operation Herrick, where they have demonstrated their outstanding war-fighting skills and cultural adaptability. I am proud to have two Queen’s Gurkha orderly officers with me here this evening.

Moving on to recent events in Nepal, the major earthquake tragically led to significant loss of life and destruction to property, and our thoughts are with the people and Government of Nepal at this difficult time. The United Kingdom’s disaster relief response has been led by the Department for International Development, which has provided over £33 million in direct and indirect aid, as was rightly pointed out by my noble friend Lord Sheikh. This aid included the provision of search and rescue teams, trauma medics and logistic supplies. I can say to the noble Lord, Lord Davies of Stamford, that the Ministry of Defence supported these efforts with an airlift and by deploying

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over 100 additional Gurkha personnel. We offered the services of our Chinooks, but the Government of Nepal did not consider that they were necessary. My right honourable friend the Secretary of State for International Development has visited to inspect and assess the damage and speak to those delivering aid.

The additional Gurkha personnel went into Nepal under the auspices of British Gurkhas Nepal, which is the unit based in Nepal looking after recruitment and welfare matters for the brigade. British Gurkhas Nepal and the Gurkha welfare scheme, which is the field arm of the Gurkha Welfare Trust, are working together to ensure that our pensioners and families are looked after alongside all needy persons in villages affected by the earthquake. It is important to state that we are not discriminating as to who gets the help. Instead, we are providing to the neediest first with the aim of everyone being under cover with access to water before the monsoon rains arrive.

Reconstruction efforts are to focus in the short term on protecting isolated Gurkha communities through the approaching monsoon season. This will include the construction of temporary shelters, the provision of clean water supplies and basic sanitation, and the delivery of aid and basic medical supplies. A squadron from the Queen’s Gurkha Engineers is currently deployed on this task. Subject to Government of Nepal approval, work priorities will primarily be driven by humanitarian need within the Gurkha communities, rather than uniquely supporting the families of serving Gurkhas and Gurkha veterans. To answer the noble Lord, Lord Burnett, we believe that the museum at Pokhara was not badly damaged.

The Gurkha Welfare Trust is the principal Gurkha charity and it maintains through its field arm, the Gurkha Welfare Scheme, a network of welfare centres in Nepal to look after Gurkha veterans in need. The Government provide financial support to the Gurkha Welfare Trust by means of an annual grant in aid of over £1.5 million which pays for the majority of the costs of the Gurkha Welfare Scheme in Nepal. In addition, the Government announced in January that they were giving the trust £5 million from the LIBOR fines to assist its work in Nepal, so I would say to the noble Lord, Lord Bilimoria, and the noble Baroness, Lady Flather, that this is a clear statement of the commitment to and recognition of the work done by the trust in support of Gurkha veterans.

This year we celebrate 200 years of Gurkha service to the Crown. This milestone is a further opportunity to thank the Gurkhas for all that they have done to preserve our freedom and security in many conflicts around the world, most recently in Afghanistan. To celebrate the Gurkhas’ unique service, there are over 100 events of varying size taking place, both in the United Kingdom and around the world, reflecting the brigade’s previous service. These events are being conducted by the serving brigade, the Gurkha Brigade Association and the Gurkha Welfare Trust.

Major events have already taken place. In late March, a gathering of over 3,000 people attended a celebration in Kathmandu, before the earthquake struck. On 30 April, contingents from the four major Gurkha units, with the Band of the Brigade of Gurkhas and the Queen’s

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Truncheon, marched from Wellington Barracks down the Mall to the Gurkha statue outside the Ministry of Defence. This was followed by a short service to commemorate those from the brigade who have given their lives in the service of the Crown.

Most recently, throughout May, each of the four major Gurkha units has conducted public duties, providing the guards at Buckingham Palace, St James’ Palace and the Tower of London. And as we have heard, a major event, the Gurkha 200 pageant, took place last night at the Royal Hospital Chelsea in aid of the Gurkha Welfare Trust. Her Majesty the Queen attended, along with other members of the Royal Family. I am delighted to note that at least two noble Lords here this evening were able to attend.

I shall answer a few of the questions that were put to me. I turn first to the noble Lord, Lord Burnett, who asked whether the Gurkha battalion would remain in Brunei. The answer to that is yes, because a new agreement was recently signed with the Sultan. He also talked about jungle warfare training. As he knows, this is carried out in Brunei by the Gurkha battalion and other British Army units. In addition, the British Army Jungle Warfare Training School is based in Brunei and is supported by the Gurkhas.

Questions were asked by the noble Lord, Lord Burnett, and others about recruitment. No decisions have been taken about increasing the number of Gurkhas at present, but equally no decisions at all have been taken about reducing their numbers. I can say to the noble Viscount, Lord Slim, that the Brigade of Gurkhas has been wholehearted in its support for its kith and kin in Nepal. Its members are all very keen to deploy in order to support and assist if they can. The brigade has been incredibly active in fundraising and has generated in excess of £300,000 to help the relief effort, which is a commendable achievement.

I would like to thank the noble Lord, Lord Bilimoria, for raising this important subject for debate. I will write to noble Lords on questions that I have not been able to cover this evening, but I am pleased to have had the opportunity to explain the Government’s position on both the support we are providing for the Gurkha Welfare Trust in Nepal following the tragic events of the earthquake and the celebrations behind 200 years of Gurkha service to the Crown.

Lord Bilimoria: I thank the noble Earl for his response, but there was one very specific question: can the Government assure us that there will be no further cuts to the Gurkhas, regardless of the SDSR?

Earl Howe: My Lords, I am sure the noble Lord knows that I cannot separate the Gurkhas out from the SDSR. It would be as impossible to do that for the Gurkhas as for any other part of the British Army. However, I note the strength of feeling that the noble Lord has expressed, and I am sure that that will be conveyed back to those who are in the throes of preparing the initial stages of the SDSR.

Lord Rosser: My Lords, I understand that a commitment has been given by the Prime Minister that there will be no further cuts in our Regular Army.

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Why is there any doubt that there will be any cuts so far as the Gurkhas are concerned? Are they not covered by the pledge that was given by the Prime Minister?

Earl Howe: My Lords, the noble Lord will know that the commitment given by the Prime Minister related to the total number of the Regular British Army so, as much as I would like to, I cannot give a commitment about a specific segment of the Army.

Lord Martin of Springburn (CB): My Lords, I will not take a moment. I have been very impressed by all

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the contributions to the debate. If Gurkha veterans living in the United Kingdom in their advancing years need to do so, will they get access to the hospital charities such as Erskine in Scotland, along with the other military hospitals?

Lord Ashton of Hyde (Con): I should say to the noble Lord that this is a Question for Short Debate with a speakers’ list. I am sure that my noble friend the Minister will be able to write to the noble Lord.

House adjourned at 8.59 pm.