Charities (Protection and Social Investment) Bill [Lords]
(Limited Text - Ministerial Extracts only)
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The Minister for the Cabinet Office and Paymaster General (Matthew Hancock)
I beg to move, That the Bill be now read a Second time.
Every hon. Member will know of a charity or charities doing extraordinary work in their constituency, as will you, Mr Speaker. Many have served or will serve as patrons or trustees. They may even have subjected themselves to ritual humiliation to raise money and awareness. I have dressed up as a sumo wrestler, carried a pedometer for a week and even lost two stone to race a charger around the Newmarket July course. Charities channel the best of our instincts against the worst that life can inflict, whether that is sickness of mind and body, entrenched poverty or natural disaster.
So often, charities lead the way for us in Government to follow. Long before there was an Education Act, an NHS or a welfare state, charities that knew people could not wait had set up hospitals, schools and almshouses. Today, their compassion and kindness are matched by ideas and innovation. When Paula and Robert Maguire posted their first ice bucket challenge video, they expected to raise about £500 for the Motor Neurone Disease Association, but the campaign went viral, many of us joined in and they ended up raising £7 million. Let us look at Bristol Together, a social enterprise that buys and refurbishes properties and employs ex-offenders to carry out the work: that social investment is transforming lives.
The Government are committed to a flourishing civil society. We have protected the budget of the Office for Civil Society, we are expanding the brilliant National Citizen Service and we are rolling out more locally designed social impact bonds. Along with those opportunities, there are challenges. Perhaps more than any other kind of enterprise, charities trade on their reputation. Scandals of poor governance or unscrupulous fundraising undermine public trust, tarnishing the vast majority of charities that are well run and seek only to do good.
Sir Edward Garnier (Harborough) (Con)
I could not agree more with the opening remarks of my right hon. Friend in describing, to use an awful expression, the charitable landscape. I am a patron of Unlock and a trustee of the Prison Reform Trust. Both organisations have concerns, which I hope he can allay, that this much needed legislation might make it more difficult for them—bearing in mind that the subjects that interest them are prisons, prison reform and the condition of prisoners—to have among their trustees people with criminal convictions. The point is obvious, but I am sure that he can deal with it.
Matthew Hancock
My right hon. and learned Friend. If he would like to raise it any further, I could continue. I commend the two charities of which he is a trustee for their work. While protecting charities through the Bill, we will of course seek to support the good work that excellent charities do. The Bill proposes extra restrictions for those with unspent convictions. However, the Charity Commission will be able to waive those restrictions and, as with almost all the extra powers of the Charity Commission, it will be possible to appeal to the charity tribunal. I hope that he is reassured by the safeguards that are in the Bill, and that we can work with him to ensure that they are applied properly to charities that work in the important area he mentions.
Sir Edward Garnier
My right hon. Friend has been extremely clear and helpful. May I make him an offer? I know of his success at Newmarket racecourse. There is a very good racecourse, Leicester racecourse, in my constituency. If he would ever like to run there, he should let me know.
Matthew Hancock
I very am grateful for that unexpected invitation. I am dearly tempted. I hope that Unlock and the Prison Reform Trust will work with us to ensure that the Bill passes in a form that supports the important work that they do.
On the broader question of supporting the reputation of charities, by one measure trust in the sector is at a seven-year low. It is in all our interests that we have a strong, confident and thriving charitable sector.
The purpose of the Bill is twofold: first to tackle the challenges and then to unlock new opportunities. The main provisions of the Bill fall into three main areas: first, strengthening the Charity Commission’s powers, including over trustee disqualification; secondly, the regulation of charity fundraising; and, thirdly, the new social investment power for charities.
Let me turn to the Charity Commission’s powers. The purpose of the Charity Commission is to ensure that each of the 164,000 charities in England and Wales pursues its charitable objectives. Set up in 1853, it has done a century and a half of good work, but two years ago the National Audit Office and the Public Accounts Committee found that it was failing in its core duty. In particular, they found that it was not doing enough to tackle the abuse of charitable status. The NAO made a series of recommendations to improve the commission’s effectiveness.
The coalition Government published proposals for new powers based on those recommendations. Following a public consultation, the draft Protection of Charities Bill was published. Pre-legislative scrutiny and the Bill’s passage through the House of Lords have resulted in further refinement. I thank all the Members, peers and others who have improved the Bill that is before the House today. These measures are just one part of a wider programme of reform, aimed at turning the Charity Commission into a tough, clear and proactive regulator.
Mr Jenkin
It pains me to point out that my right hon. Friend has left out the significant post-legislative scrutiny of the Charities Act 2006 that was conducted by my Committee, the Public Administration Committee, in the last Parliament, which was the prime precursor of this Bill. I also sat on the Joint Committee that performed the pre-legislative scrutiny of the Bill.
Will he say something about recent controversies, for example those around charitable fundraising? The Select Committee is very frustrated that we are conducting significant inquiries that the regulator, the Charity Commission, should be conducting, but it does not necessarily have the power to hold its hearings in public in a way that would demonstrate its regulatory role.
Matthew Hancock
I was going to come on to the work of my hon. Friend and his Select Committee in making sure that the Bill is in the best possible shape. I am very grateful for the work that he did at the end of the last Parliament, after the National Audit Office report, to make sure that when we had a Bill, it gave the commission the necessary powers.
We believe that the Charity Commission has the power to convene meetings in public. However, I recognise that there is a question over whether it does so. During the passage of the Bill, we will look at that point in more detail. We are prepared to accept amendments, if they are necessary to bring clarity on the point that my hon. Friend raises.
Dr Andrew Murrison (South West Wiltshire) (Con)
I agree with my right hon. Friend that pre-legislative and legislative scrutiny are extraordinarily important in this place. Will he observe, for the record, how much legislative scrutiny is being performed by Her Majesty’s official Opposition, since there are precisely no Opposition Back-Bench Members in the House?
Matthew Hancock
I hope that this Bill can unite both sides of the House. I welcome the hon. Member for Redcar (Anna Turley) to her place. My hon. Friend has made his point very clearly and it will appear on the record, but I do not want to get into an unnecessary dispute with the Opposition, given that I hope we will have all-party support for this important Bill which will strengthen the role of the Charity Commission and, ultimately, be in the best interests of charities throughout the land.
As I said, we want to provide a tough, clear and proactive regulator. Under the strong and capable leadership of William Shawcross and Paula Sussex, there has been a direct focus on tackling abuse and mismanagement. However, an effective regulator needs to have teeth. As the NAO reported, the commission needs our help to address the “gaps and deficiencies” in its legal powers. The Bill will close those gaps in the commission’s capabilities, as well as tackling a number of damaging loopholes in charity law.
Let me briefly outline the five new powers that the Bill confers. These powers will help to protect the public, the staff and the people our charities serve from those who would seek to exploit them. First, the Bill will extend the automatic disqualification criteria. Currently, the focus of the law is on barring people who have misappropriated charitable assets, but the criteria are far too narrow. We will extend them, as my right hon. and learned Friend the Member for Harborough (Sir Edward Garnier) said, to include people with unspent convictions for money laundering, bribery, perjury or misconduct in public office, those on the sex offenders register, and those convicted for terrorism offences, including individuals subject to an asset-freezing designation.
Secondly, the Charity Commission will be given new powers to disqualify in instances where an individual has behaved in a way that makes them unfit to be a charity trustee, acting on a case-by-case basis and using its judgment and discretion. That new power is essential to empower the Charity Commission to tackle those who would bring charities into disrepute, and I hope that it will be used with care and decisiveness.
Thirdly, the Bill gives the Charity Commission a new official warning power in response to low-level misconduct. That will allow a more proportionate approach for less serious cases. Fourthly, the Bill grants a new power that allows the Charity Commission to direct the winding up of a charity following a statutory inquiry. That would apply if the commission proves that a charity is not operating, or that its purposes could be promoted more effectively by ceasing to operate, and that to do so would be in the public interest. We expect that power to be used in limited circumstances, and it is subject to several safeguards.
Fifthly, the Bill closes a loophole that allows offending trustees to resign before they are removed by the commission, and then act as a trustee for a different charity without fear of repercussion. That will ensure that trustees are no longer able to escape accountability if they abuse their position of trust. As with all the commission’s existing powers, all five of those proposals would be subject to the general duty to have regard to best practice. With the exception of the official warnings power, all the commission’s new powers are subject to a right of appeal to the charity tribunal.
All five measures that I have outlined are essential to protecting the interests and reputation of the vast majority of charities that are run by people of great integrity. The Charity Commission was closely involved in developing the powers, and it fully supports them. In addition, independent research for the Charity Commission found that 92% of charities supported new, tougher powers for the regulator.
We also intend to remove clause 9, which was added on Report in the Lords. We have serious concerns about the unintended consequences of that clause, as it attempts to encompass complex case law into a single statutory provision. It would also impose a major new regulatory responsibility on the commission. Clause 9 was not proposed because of concerns about charities in general, but in a narrow attempt by the other place to undermine the Government’s manifesto commitment to extend the right to buy. It is regrettable that a Bill with widespread support was used in that way, and we cannot allow that to stand. I urge the House to reject that anomalous clause and consider the matter elsewhere.
The challenge of regulating charity fundraising has already been mentioned. We can be incredibly proud that we are one of the most generous countries in the world when it comes to charitable giving, but although people are happy to give, they do not want to be bullied or harassed into doing so. A voluntary donation must be voluntary. Earlier this year we heard about the tragic case of Olive Cooke, Britain’s longest-serving poppy seller. For years, she was targeted with hundreds of cold calls and requests for money. More than 70 charities bought her details or swapped them with other charities, and in one month alone she apparently received 267 charity letters. Sadly, since then more cases of unscrupulous fundraising practices have come to light, and we must act.
We began by asking Sir Stuart Etherington to review the regulation of fundraising over the summer, backed by a cross-party panel of peers, and I thank them for their work. Sir Stuart recommended a new, tougher framework of self-regulation, and we are working with charities to deliver that. Lord Grade of Yarmouth will chair the new independent body at the heart of that framework. It will be paid for by large fundraising charities, and it will be able to adjudicate against any organisation that is undertaking charity fundraising. The body will be accompanied by a fundraising preference service—similar to the telephone preference service—which will give the public greater control over their consent to receive charity fundraising requests.
Next, we will prohibit contractors from raising funds for a charity unless the fundraising agreement between them explains how the contractor will protect people from undue pressure, and sets out how compliance will be monitored by the charity. It will require large charities to include a section in their trustees’ annual report on the fundraising undertaken by them or on their behalf. That will include an explanation of how they protect the public in general, and vulnerable people in particular, from undue pressures and other poor practices.
Mr Jenkin
The Public Administration and Constitutional Affairs Committee—or PACAC, as we call ourselves—is concluding an inquiry into charitable fundraising, alongside our other inquiry into Kids Company. I will not pre-empt the outcome of those two inquiries, but we are concentrating our inquiries on the conduct of trustees in these matters, and their responsibility to oversee and support charitable organisations so that they reflect their values in their operations as much as in their objectives. We are making recommendations on that because it might be insufficient to rely on processes and structures to ensure that things are ethically and properly run.
Matthew Hancock
I welcome that review, and I hope that during the passage of the Bill we can consider—and where appropriate take on board—any recommendations to improve it. I am glad that the work of that Committee is taking place concurrently, and I hope that recommendations will come forward in time for them to be considered for the Bill.
Dr Murrison
How can we make more explicit the amount of money spent on management overheads, and in particular the £80 to £120 per direct debit set up that goes to chugging agencies? That must be made crystal clear to people. That is, on average, the amount for the first year of any direct debit set up in favour of a charity. At the moment, people are not clear how much of their generosity is being expended on management overall and on that practice in particular.
Matthew Hancock
I am a great fan of transparency and a supporter of transparency across Government. We should consider carefully whether further transparency should be applied to charities, and how that is best delivered. I have no doubt that transparency begins at home for charities, and best practice is for them to be widely transparent about their operations. There is a question about whether we should do more in law, and balanced arguments in both directions. I hope we can consider that during the passage of the Bill.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
Do any of the new powers that the Bill gives the Charity Commission deal with charities that depart from their original charitable ambitions and disproportionately become political funding and campaigning organisations?
Matthew Hancock
We took action towards the end of the previous Parliament to ensure that the legal framework for charities and other organisations means that they do not cross over into direct partisan political work. A review is under way into how the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 has worked. There are questions about whether that needs to go further, but the best place to deal with such issues is in the review and during scrutiny of the Bill. I understand my hon. Friend’s concerns, and it is important that our review fully considers the impact of the 2014 Act.
We regard the Etherington package, including the fundraising preference service and a move to opt-in for further contact, as the minimum necessary to rebuild public trust. We propose that regulation of fundraising happens on a self-regulatory basis, but that self-regulation must implement the review’s recommendations in full. Some people have rightly asked what will happen if self-regulation fails. We want it to work, but we are also clear that practices must change. In Committee, we intend to bring forward amendments that will strengthen the Government’s reserve powers to intervene if the self-regulation recommended by Sir Stuart fails. Predatory fundraising targeted at vulnerable people is wrong. It has shaken public confidence in charities and we are determined to stamp it out.
Alongside tackling those challenges, the Bill aims to open up new opportunities.
Mr Jenkin
I am terribly sorry for intervening again, and most grateful to the Minister for being so generous in giving way. I regret that I cannot stay to take part in the debate. The House will need to know that my Committee will produce its reports in January, in good time for the conclusion of the passage of the Bill. Before he leaves the matter of fundraising, will he bear in mind the concern of many people about some charities that raise a substantial part of their income from foreign sources? Security services are concerned that organisations posing as charities might be receiving funds from abroad for nefarious purposes. Will he consider introducing measures to the Bill at a later stage to deal with that matter? I know that that is something that also concerns the Charity Commission.
Matthew Hancock
The Chairman of the Select Committee need not apologise. He can intervene on me as many times as he likes and I will always seek to take his interventions. I know that that must happen, otherwise he will seek to get me in front of him in some other way. On my hon. Friend’s substantive point, that concern has been raised with us. We want to consider the matter in more detail as the Bill passes through the House.
The Bill seeks to open up opportunities for charities to do more to fulfil their mission by providing a new power of social investment. Social investment seeks a positive social impact and a financial return, trying to make money go further. It is a huge and growing chance for UK charities to make more of their assets in a field where the UK is already the world leader. In 2014, the Law Commission conducted a review of charities’ social investment powers. It found a lack of clarity around charities’ social investment powers and duties, and concluded that that could be deterring some charities from getting involved in this exciting new field.
UK charities currently hold assets of over £80 billion, but they have made social investments of about only £100 million. We think that with the right support that market could double in the next few years. The Bill will ensure that more charities have a chance to take full advantage of social investment should they so wish. It removes the existing uncertainty by providing a specific new power to make social investments. It also sets out trustees’ duties to ensure that all social investments are made in the best interests of the charity. That will allow charities to make investments with the dual aim of fulfilling their mission and achieving a financial return. It is the way of the future and it is happening here in Britain. We want to support it to go further.
The work charities do transcends politics and unites hon. Members on both sides of the House. We want all charities to enjoy the very highest levels of public trust and esteem, and the generosity that brings. By delivering a more effective regulator, by tackling unscrupulous fundraising and by unleashing the power of social investment, the Bill will strengthen that trust and allow charities to do more with that generosity. I commend the Bill to the House.
The Minister for Civil Society (Mr Rob Wilson)
I thank all hon. Members for their excellent contributions to this debate. Clearly, these issues are very important to them and their constituents. May I add my welcome and congratulations to the hon. Member for Sheffield, Heeley (Louise Haigh) on her first outing at the Dispatch Box? I am sure that it is the first of many.
It is clear that the House has great respect and admiration for the good work currently being done by charities throughout the UK. I also know that hon. Members have much experience and expertise of charities in the voluntary sector, which was demonstrated during some of the speeches today.
There is also a strong desire to protect the privileged position that charities hold in the eyes of the public, as was demonstrated in the latest world giving index, which found Britain to be the most generous nation in Europe. We also have a strong, diverse and growing charity sector. Over the period of the last Parliament, the number of registered charities in England and Wales increased by more than 2,000 to 165,000. Their combined income has grown by more than £10 billion, and is now just short of £70 billion a year.
Before I address the remarks that have been made by hon. Members, let me take the time to echo a point that has been made throughout this debate. The vast majority of charities in this country do excellent work and are run by good, honest and generous people. They wish to help those most in need and make the world a better place. I particularly wish to pay tribute to charity trustees, without whose unpaid efforts there would be no charity sector. For their selfless passion and commitment, they have my respect and sincere thanks. However, their good work is threatened by a small minority who seek to abuse charitable status for their own ends. The Bill will help the independent regulator to take robust action against that small minority. By doing so, it will reinforce public trust and confidence and protect the reputation of charities as a whole.
The powers in the Bill have broad support from the charitable sector and the public. The charity commissioner has been involved throughout the process of developing these proposals. The sector has also been subjected to public consultation and pre-legislative scrutiny, both of which helped inform and refine the proposed powers.
Some have argued that the Bill would give the Charity Commission too much power, or that some of the powers are too broad. In response, I say that the Bill seeks to achieve a balance. The new commission powers need to be broad enough to make them useful. If they are too narrow they would be impractical and go unused or would leave loopholes to be exploited by the unscrupulous. Charities also need to know the circumstances in which the commission will use its powers.
Although this Bill achieves the right balance, I wish to draw the attention of hon. Members to a couple of key safeguards. The Charity Commission is subject to a general duty under section 16 of the Charities Act 2011. That means that the commission must be satisfied that the exercise of any of its powers would be in line with the principles of best regulatory practice, including that it is proportionate, accountable, consistent, transparent and targeted only at cases in which action is needed.
Fiona Bruce
I thank the Minister for drawing our attention to that section. It is a pity that it was not invoked when the whole interpretation of public benefit was being debated, and that the Charity Commission did not refer itself back to it then. My concern is that this Bill could be in force before there is a clear definition of non-violent extremism. The Government’s counter-extremism strategy says that this Bill would give the commission powers to disqualify trustees for wide reasons, including past conduct and a variety of other abuses, such as extremism. In the same strategy, there is also reference to non-violent extremism. Will the Minister address that point?
Mr Wilson
I thank my hon. Friend for her contribution this afternoon and her question. She raises some extremely important issues, with which I intend to deal in full. As she has asked, let me just deal with the public benefit and religion issue first. Religious charities play a hugely important role in our public life. Over 25% of registered charities have a religious purpose and are often working in some of the most hard-to-reach communities. The advancement of religion is one of the oldest charitable purposes, and there is no question but that it is under threat. There are more than 25,000 registered religious charities, almost all of which have no difficulty in demonstrating their public benefit.
My hon. Friend mentioned the Plymouth Brethren in her speech. Its case was an exception, and I am pleased that it was resolved in a sensible way, even though it took too long. I will come back to some of the other issues that she raised later in my comments.
All the proposed commission powers in the Bill have a right of appeal, in most cases to the Charity Tribunal, ensuring that there is independent judicial oversight of the exercise of the commission’s powers. There have also been some questions, notably from my right hon. and learned Friend the Member for Harborough (Sir Edward Garnier), about the rehabilitation of offenders.
The Government believe that individuals with serious convictions should not be able to hold the position of charity trustee and have control over charitable funds and fundraising activities until those convictions are spent or a waiver from disqualification is obtained from the commission. The waiver regime exists to enable disqualified individuals who wish to be a charity trustee to apply to the Charity Commission for their disqualification to be overturned.
A waiver application would be considered on a case-by-case basis, and the Charity Commission would take into account the nature and seriousness of the conduct that had resulted in the conviction and consequential disqualification.
A decision by the Charity Commission not to grant a waiver could be appealed to the Charity Tribunal, which would consider the matter afresh. That strikes me as a fair and proportionate system that on the one hand protects charities from individuals who present a known risk, and on the other hand provides for the rehabilitation of offenders and a way back into charity trusteeship on a case-by-case basis.
People have also raised concerns about the official warning power and the fact that there is no right of appeal to the Charity Tribunal. There is a right of appeal, which is judicial review. That is the same position as now, where the commission publishes its operational compliance case reports on non-inquiry cases that have attracted public interest and that highlight important lessons for charity trustees.
The Bill provides for a period of time to allow representations to be made in relation to an official warning, which the commission would be obliged to consider. There is then the option of judicial review. We consider that proportionate.
A right to appeal an official warning to the tribunal would be disproportionate and could tie the commission up in red tape, rendering the power impractical for its intended purpose. The last thing that we want to do is give the Charity Commission powers that it cannot use, and for which it could be criticised for failing to exercise several years hence. The Joint Committee that undertook pre-legislative scrutiny agreed that, with the appropriate safeguards in the provision, judicial review was the appropriate route for appeals.
Let me turn now to fundraising. I was deeply disappointed to see the extent of poor practices by large charities in relation to their fundraising. That matter was widely exposed by the media earlier this year following the sad death of Olive Cooke. Since then, further damaging cases have come to light, and once again the reputation of charities has been put at risk by the actions of a small minority. Public trust and confidence in charities have not been this low since 2007, and charities now rank 12th in the list of most trusted institutions, below supermarkets and television and radio stations. Only 48% of people said they trusted charities.
In response to the fundraising scandals, we acted swiftly to amend the Bill in the other place to reinforce charity trustees’ responsibilities and accountability for the charity’s fundraising. Clause 14 will encourage charities to exercise greater control and oversight of those who fundraise for their organisation. It will ensure that there are proper processes for dealing with vulnerable people and will generally safeguard the public. Large charities will make this commitment public through their annual reports so that anyone can hold them to account for how they interact with them.
I asked Sir Stuart Etherington to conduct an independent review of how fundraising regulation could be improved to safeguard vulnerable people and better respect the public’s wishes about how and whether they are contacted. He was supported by a cross-party panel of peers. I have since accepted the review’s recommendations in full, and I am now encouraging the sector to move quickly and firmly to show that it gets the public’s anger and concern and is committed to making self-regulation work.
I also expect the sector fully to back the new fundraising regulator, both financially and through compliance with its rulings. In the past few weeks, I have announced that Lord Michael Grade has been recruited as the interim chair of the new body and will oversee the set-up and initial phase of operations. I am confident that he is the right man to lead this important task and that the sector will unite behind him to address these urgent issues and restore public trust in fundraising.
The new regulator will also host the fundraising preference service, a tool that will allow people to opt out of receiving fundraising requests and that will stop charities wasting resources on approaching those who do not wish to hear from them. A working group is currently being set up to establish how the service will work in practice. In addition to a simple reset button, there will no doubt be a few more nuanced options should people wish to opt into certain charities only. Crucially, it will provide everyone with a way to get off charity contact lists they no longer wish to be on.
Charities need to demonstrate that fundraising and its self-regulation can work in the best interests of the public. They will have the chance to do so at a summit tomorrow, when the next steps for implementing better self-regulation will be announced. I hope that this will be a constructive and collaborative meeting where charities show their commitment to the new self-regulator and to meeting the public’s expectations. Should they fail to do so, I stand ready to step in to safeguard the public and their trust in charities.
For that purpose, I will seek to add two reserve powers to the Bill: one to compel charities to sign up to the new regulator and a second to mandate the Charity Commission with regulation should the sector fail to rise to the challenge. I also welcome the commission’s revision of its guidance for charity trustees on fundraising, which it has published today. It reminds trustees of their duties and responsibilities in relation to fundraising, including the need to protect their charity’s reputation and that of the wider sector.
The Bill also provides support to social investment. As many will have seen in the autumn statement, the Government have shown a strong commitment to social investment, having invested £80 million to grow social impact bonds in the UK. For charity investors, the power of social investment enables them to increase their mission impact and sustainability by making investments that provide a financial return as well as furthering the purpose of the charity. Although most charities can make social investments under the current law, it can be complex and costly to do so. The new social investment power for charities in clause 15 was recommended and drafted by the Law Commission to overcome that complexity and reduce the costs of investment for charities. It was widely supported on consultation.
The UK is already recognised as a world leader in social investment, an area in which the Government have taken pioneering action. For example, we have set up Big Society Capital and stimulated the use of social impact bonds to deliver services to some of the most disadvantaged in society through initiatives such as social outcomes funds. With the power of social investment conferred on charities by the Bill, we take another step forward in building a sustainable social investment ecosystem.
I now turn briefly to interventions and speeches. My hon. Friend the Member for South West Wiltshire (Dr Murrison) asked about the transparency of direct debit fundraisers. Professional fundraisers are already required to state how much they are paid for asking the public to donate, but I would be happy to discuss the matter further in Committee. I was delighted by the contribution from the hon. Member for Edinburgh East (Tommy Sheppard), who spoke for the SNP and may well have set a precedent under English votes for English law: he said that the SNP would not be taking part in any other stages of the Bill. I hope that that precedent will now stand.
I thank my hon. Friend the Member for Erewash (Maggie Throup) for an uplifting speech and her comments about her inaugural volunteering day. I hope it sets a precedent for other MPs. It is great to see that that will now become an annual event, and I certainly wish it well. I also thank the hon. Member for Clwyd South (Susan Elan Jones) for supporting the fundraising preference service. For the sake of fundraising in the future, it is important that it works. I also thank my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton), who told us the wonderful story about poppy knitting in one of her villages. It demonstrates the value of civil society and the contribution of charities. She is absolutely right that a small kindness can make a big difference.
For several reasons, legislating for a maximum trustee term does not appeal. The evidence is that 50% of charities are carrying at least one trustee vacancy, and we must be mindful that the role is a voluntary one. My hon. Friend the Member for Erewash mentioned the impact on small charities and made an important point about minimising the burden of regulation, as did the hon. Member for Clwyd South. We are keen to minimise the burden of regulation on small charities. For example, the new reporting requirement on fundraising in clause 14 will apply only to charities with incomes over £1 million, and the new fundraising self-regulator will need to consider exemptions for small charities from the fundraising preference service.
My hon. Friend the Member for Newark (Robert Jenrick) made a strong speech that clearly set out how big charities were causing great concern for some smaller charities. It is certainly our intention to try to protect them. The Opposition raised concerns about campaigning. To be clear, charities cannot engage in party-political campaigning, and where they undertake any other types of campaigning to support their charitable purposes, they must avoid adverse perceptions of their independence and political neutrality. In addition, they must not embark on campaigning to such an extent that it compromises their legal status as a charity. The Charity Commission provides clear guidance, in CC9, about what is permitted. It makes it clear that charity law recognises that non-party political campaigning can be a legitimate activity for charities and sets out the general principles.
A concern was raised about whether the commission should be able to publish official warnings. Charities exist for public benefit and depend on public support, so there should be transparency and publication of official warnings when the regulator considers it necessary to intervene, unless there is a good reason not to publish them. There should always be an opportunity, though, to make representations about the factual accuracy of a statutory warning before it is published, and a process for representations is included in the Bill. Concerns were also raised about the scope of official warnings being too broad. We consider the scope to be right and clear. Under the Bill, a warning can be issued in respect of a breach of a statutory provision, breach of a commission order or direction or breach of a trust or duty.
I will turn briefly to the concerns about extremism raised by my hon. Friend the Member for Congleton (Fiona Bruce). Extremism or the terrorist abuse of charities of any kind is very rare but must be addressed to protect public trust and confidence in charities. Although it may not represent most of the Charity Commission’s compliance work, it represents a serious risk to public trust and confidence. The reforms proposed in the Bill are not specifically focused on counter-terrorism or extremism—they would enable the commission better to tackle all types of abuse of charity—so the Bill does not seek to define extremism, nor should it. Charities and their work can be an important protection against extremism. We have no intention, as I said, of undermining freedom of religion or freedom of speech, and the Bill has been certified as compatible with the European convention on human rights.
Mr Wilson
I am going to finish there as I know that many Members want to get away from the Chamber today.
This Bill is about protecting charities and safeguarding their place in the public’s mind. It is about ensuring that charities will not fundraise in a manner that victimises the most vulnerable in our society, and it is about giving charities a new way to utilise their assets through social investment. Charities rely on the public’s trust and confidence. Abuse, where it happens, must be rooted out. These measures have broad support, as my right hon. Friend the Minister for the Cabinet Office said earlier: 83% of the public and 92% of charities support new powers being introduced for the commission.
Charities play a vital role in our communities and this Bill aims to bolster their position in the public’s trust and help them to continue the good works they have being doing for hundreds of years, continuing our country’s long and rich tradition of charity. On that basis, I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Charities (Protection and Social Investment) Bill [Lords] (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Charities (Protection and Social Investment) Bill [Lords]:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 7 January 2016.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Proceedings on Consideration and up to and including Third Reading
(4) Proceedings on Consideration and proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.
Other proceedings
(7) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed. —(Sarah Newton.)
Question agreed to.
CHARITIES (PROTECTION AND SOCIAL INVESTMENT) BILL [LORDS] (Money)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Charities (Protection and Social Investment) Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided. —(Sarah Newton.)
Question agreed to.