Charities (Protection and Social Investment) Bill [HL]

Baroness Barker Excerpts

Monday 20th July 2015 Lords Chamber

[Lord Best (CB)]

My Lords, I will raise a somewhat technocratic reason why the amendment could be very important. If government compels charitable housing associations to sell their assets—even if they are reimbursed by the Government—and then tells them how to spend the money they receive from selling their assets, these charities may become classified by the Office for National Statistics as “public bodies”. If government takes away the autonomy of charities and assumes the role of their boards or trustees in crucial decision-making, a line may be crossed. Already, government heavily regulates the activities of charitable housing associations and determines their income by instructing them on the rents that they must charge. In the event that government also tells them when to dispose of their assets and at what price, and subsequently instructs them on how to use the money, intentionally or not, the charitable housing associations could be deemed by the independent Office for National Statistics as public bodies.

Does that matter? I am afraid that it matters a lot. At present, only the grants these bodies receive from government count as public expenditure, so their borrowing from banks, building societies, et cetera, adds nothing to government debt. All that changes if housing associations are classified as public bodies. The £60 billion they have already borrowed would be added to the national debt and all their new borrowing—around £4 billion this year—would be added to the Government’s annual deficit. So if compelling housing associations to sell their homes—and compelling them to use the proceeds, perhaps to replace the ones they have sold—leads to these bodies being classified as public bodies, government finances will take a huge hit. Government would then feel obliged to curtail drastically further borrowing by housing associations, which would stop them delivering the affordable homes that the nation so clearly needs. There are other reasons for not pursuing the latest right to buy sales policy, but this may be the one that causes the Treasury the greatest concern. This amendment would prevent government making a mistake that it could later regret deeply.

[Baroness Barker (LD)]

My Lords, at the moment I am training for a charity event and I spend quite a lot of time, mostly at weekends, cycling rounds the parks of south London and north Surrey. The existence of alms houses and charitable housing associations is a timely reminder of the importance that the charitable sector has always had in this field and of the extent to which the charitable housing sector has always been an irritant to government, both locally and nationally. There is something marvellous about preserving its values in concrete.

We should remind ourselves that this is the protection of charities Bill. It is principally concerned with the extent to which the Charity Commission has the power to act against charities and individual trustees to ensure that the general public continue to have faith and confidence in charities. The amendment moved by the noble Baroness, Lady Hayter, may not be perfect for her intent, but the way that I read it is that she is seeking to get from the amendment and the discussion of it an undertaking that, should the Charity Commission be called upon to judge the performance of a charity or its trustees under the policy that is being brought in—as the noble Lord, Lord Cormack, explained, it still being formulated—the test which the commission will apply is: did the trustees act in alignment with the charity’s objectives? Of course, those objectives may not change in ways that are consistent with government policy. That is simply what the noble Baroness is trying to get on the record. For that reason, although the wording may not be perfect, the intent behind the amendment is worthy of our support.

[Lord Graham of Edmonton (Lab)]

My Lords, the Government’s housing policy is in a mess, and I speak of the problems being faced by a number of good people who have so far done well from legislation. The right to buy was approved by everyone who was interested in wanting to give people an opportunity to get their foot on the property ladder. However, I remind the House of what has happened. The right to buy carries with it the right to sell. Over the last 30 years those who have bought their houses at a discount, having justified and verified their entitlement to it, have been glad to have the opportunity not only to buy but to sell. As a consequence, the whole policy has been warped and needs to be looked at in general. I shall give your Lordships an illustration.

There is a couple who operate in the Ashford area. The Guardian newspaper last year reported that they have amassed not just one or two properties but, by purchasing in the main ex-council houses, a portfolio of 1,000 properties. That situation, with people looking for an opportunity to make money, existed when I was the Member of Parliament for Edmonton. They bought their house and then rented it out. I hope to speak in tomorrow’s debate on the Budget and extend this argument. People should not kid themselves that the main beneficiaries of the purchase of council houses have been the people who occupied them at the time. The people quoted in the newspaper said that they were thinking of selling their portfolio. They already had an estimate of its value: through their empire having grown and grown, it was estimated to be worth £100 million.

--- Later in debate ---

[Lord Bridges of Headley]

My Lords, I am again grateful to the noble Baroness for tabling her amendments and for bringing this issue to the attention of the House. I will first speak to Amendment 14 tabled in my name.

When this issue was debated only a few weeks ago, I said that three questions needed to be answered: first, whether the standards fundraisers have set themselves are set high enough; secondly, whether the structures for self-regulation are the right ones; and thirdly, whether fundraisers and the charity trustees who oversee them accept the need for change to ensure that donors are treated with honesty, respect and decency. We now know rather more about all three issues, and on all three, more needs to be done to maintain and strengthen public trust in charities—which is a key underlying aim of the entire Bill.

On the first, the news since that debate has been profoundly depressing. The revelations in the Daily Mail did what investigative journalism is supposed to do: shine a light on people who are treating others badly because they think no one is looking. I thank the newspaper for doing that. Of course, the stories in the Mail do not typify the majority of fundraisers, who are in the main thoroughly decent people doing a vital job, be it holding jumble sales, doing fun runs or hosting large charity events. However, allegations of inappropriate pressure being placed on those with dementia and of ludicrously self-serving interpretations of the law on data sharing have rightly angered broad swathes of the community, and many in the charity and fundraising sectors too.

I know that the fundraising sector has tried to respond and that the self-regulatory bodies are working on a number of proposals on issues such as cold calling, data sharing and regularity of contact. In part this has been in response to the challenge laid down by my honourable friend in the other place, the Minister for Civil Society, Rob Wilson, who has been working hard on this matter and has put in place some swift measures to bolster public confidence. He and I—and I think the noble Baroness, Lady Hayter—agree that this work needs to continue apace. But the answers the fundraising bodies have so far provided are piecemeal and do not comprise a convincing answer to the second question, which is whether the system as a whole is the right one. Indeed, I think few observers would argue that the system’s response under the stress of the last few weeks has made a compelling case that it is.

I therefore very much welcome the fact that Sir Stuart Etherington has accepted the Minister for Civil Society’s request to chair a cross-party panel to address just this question. I am delighted, too, that my noble friend Lord Leigh of Hurley, the noble Baroness, Lady Pitkeathley, and the noble Lord, Lord Wallace of Saltaire, have agreed to join that panel. The review will take a root and branch look at what is needed to ensure that we have a system that is fit for purpose and that supports public trust and confidence in charities. Sir Stuart has the licence to be bold and imaginative. His panel has set a brisk pace. It has met once and will report in late September. Its members have our full support.

The response of sector leaders to Sir Stuart’s findings will in part form the answer to the third question, of whether fundraisers and the charity trustees who oversee them accept and fully embrace the need for change. It is now quite clear that the leaders of some of our charities need to take much greater responsibility for the fundraising carried out in their name. We cannot have a “don’t ask, don’t tell” approach in the sector, where a charity’s CEO and trustees choose not to attend in any great depth to how their organisation engages the public when fundraising. The CEO’s responsibility for fundraising cannot end with simply demanding that the fundraising director brings the money in while he or she focuses exclusively on the charity’s mission in the field.

Our amendment seeks to address just this point in two ways. First, it would require third-party fundraising organisations, of the sort that featured so heavily in the recent Mail articles, to write their fundraising standards into their contracts with the charities that employ them. That would include how the fundraiser will protect vulnerable people and how the charity will monitor how standards are met. That way, all parties will be clear and upfront about what will be done in the charity’s name, and about their respective responsibilities.

Secondly, the amendment would require charities with incomes over £1 million to set out in their annual reports their approach to fundraising, whether they use paid third-party fundraisers and how they protect the wider public and vulnerable people in particular from undue pressure in their fundraising. Again, the point is to require the leadership of a charity to take responsibility for their fundraising practice and set it out for all to see. We know that this is only part of the picture and it is intended to complement a strengthened self-regulatory system, not to replace it. Furthermore, in keeping with our entire approach, these measures seek to be proportionate and targeted to address the issues as we see them today.

I know, too, that the noble Baroness’s amendments are intended to ensure a well-regulated system, bringing in the valuable funds that serve beneficiaries while protecting the interests of the public who give that money. Clearly, the adequacy of the existing self-regulatory system—the elements of it and how they combine together—must be looked at afresh but state regulation is far from a panacea. We firmly believe that Sir Stuart’s panel should be given the chance to succeed and self-regulation to succeed with it. My concern is that the amendment pre-empts the review and in effect moves straight to statutory regulation, even as it cements one part of the existing self-regulatory landscape in place. I suggest we await Sir Stuart’s findings before we invest so heavily in the FRSB. As the noble Baroness said in Committee, the FRSB’s self-regulation system has so far “failed to work”.

As for the reserve power, that remains at Ministers’ disposal should self-regulation be found to be unworkable. However, I do not believe that we are yet at that point—I repeat, yet. Furthermore, statutory agencies such as the Information Commissioner and the Charity Commission are already permitted to intervene where there are serious abuses. I know that the former is investigating the GoGen allegations and has very significant sanctions at his disposal should serious wrongdoing be proved. I therefore continue to hope that the jolt the fundraising and charity sectors received in the last few weeks and the action we are taking will usher in an era of greater awareness and responsibility for fundraising within the sector.

I hope that on reflection the noble Baroness will not press her amendments. I thank the noble Lords, Lord Watson and Lord Wallace, the noble Baroness, Lady Pitkeathley, and my noble friends Lord Hodgson and Lord Leigh for their contributions on this issue. I beg to move.

[Baroness Barker]

My Lords, I thank the Minister for introducing this new amendment in such detail and making time available to explain its purpose to Members in meetings. I preface my remarks by returning to an observation I made at Second Reading about the alacrity with which some matters have been attended to. This is one of those occasions on which there is a great deal of haste which is perhaps not warranted and may not be helpful in trying to get to the root of the problem.

While the Minister wishes to commend the Daily Mail for its attention to this issue, I simply wish that the Daily Mail would turn its attention to the activities of many of the financial institutions of this country, not least the banks, in their treatment of people with Alzheimer’s and other vulnerable adults. If it were to do that, it would rise in my estimation—not a difficult thing, I have to say. But if it genuinely cares about people who are vulnerable, rather than just wishing to have a go at charities, it will continue its campaign and look at the issue in a much wider way.

That said, everybody in the charity sector understands that there is a problem—and the charitable sector has sought for some considerable time to deal with this issue. It has been a long-standing problem. I remember when I started working with charities 25 years ago, we were not dealing with the internet and there was not so much direct marketing, but there was direct marketing, and still the same complaints happened, although perhaps not to such a degree. I do not know whether noble Lords heard the Information Commissioner, Christopher Graham, on the “Today” programme a couple of weeks ago, addressing this exact issue. He was quite clear; he said that we did not need further legislation—that we have the legislation that we need.

The key issue is about the multiple use of donor lists by charities. We need to make sure that all charities are fully observant of existing data protection laws. We do not need the legislation. That said, the Government are to be commended on what they propose in this amendment. At the very least, it will cause the charitable sector to think long and hard about the regulation and guidance, which is what will really matter to charities’ daily activities. We should be in no doubt that charities have the right to continue to try to raise money, and they need to do so. It is not a question of whether they should—it is just how.

The Minister would expect on his first outing that an amendment of this nature would be subject to a number of queries and criticisms in your Lordships’ House. I would focus noble Lords’ attention on new subsection (8) in Section 59 of the Charities Act 1992, as proposed in the amendment. It talks about,

“unreasonable intrusion on a person’s privacy … unreasonably persistent approaches for the purpose of soliciting or otherwise procuring money or other property”,

and,

“placing undue pressure on a person to give money or other property”.

That is fine—but who decides what the definitions are, and who decides whether the activities of a charity have been unreasonable or have placed “undue pressure” on someone? When it has been decided that a charity has acted inappropriately, who is responsible for administering what sanctions to a charity that is found to be deficient?

A further point that I would like the Minister to address is how having this legislation would help a member of the public to understand what they should do were they to be on the receiving end of “undue pressure”, or if they knew of somebody else on the receiving end of such pressure. How would they know what to do?

I draw noble Lords’ attention to subsection (1)(e) of new Section 162A of the Charities Act 2011, as proposed in the amendment. It deals with the annual reports on fundraising standards that charities are supposed to bring forward under this legislation. They have to talk about,

“the number of complaints received by the charity or a person acting on its behalf about activities by the charity or by a person on behalf of the charity for the purpose of fundraising”.