Charities Bill [HL]

Debate between Baroness Finlay of Llandaff and Lord Phillips of Sudbury

Monday 12th September 2011 Lords Chamber

[Lord Phillips of Sudbury]

My Lords, it is a strange feeling to be moving a group of amendments that comprise the totality of the amendments to this 250-page Bill. But this is a consolidation Bill. As one who has served on the Joint Committee on Consolidation Bills, I know well enough that on consolidation one is not allowed to change substantive law. I emphasise that the amendments that I have tabled and the comments that I am about to make bear no ill reflection whatever on the Bill team or the parliamentary draftsman. Indeed, I have had the utmost co-operation from all of them.

However, with a Bill that affects the voluntary sector in particular, one must seek to make that measure as comprehensible as possible. I could not refrain from tabling a set of amendments to attempt to make the crucial definition clauses of the Bill fractionally more understandable to the lay reader. The last thing one wants in the world when legislating for the voluntary sector is to force it into the hands of lawyers who will do their best but who, I am afraid, are expensive beasts. I speak as one of 53 years duration. The amendments taken as a group effect no change but they see the definition of “charitable purpose” or “charitable purposes” brought into one clause, Clause 2, which will then enable Clause 11 to be removed from the Bill. In practical terms, that will be of considerable benefit.

Before explaining why, I should say to the Committee that I am aware that Section 73 of the Charities Act 2006 requires a review of the 2006 Act, which is about to commence, which will end with a report being placed before Parliament. Indeed, I was instrumental, with others, in getting that unusual provision written into the 2006 Act. But there is nothing in the Act to say that anything shall flow from the report. I produced this amendment determined that at least in the interim years—one could be talking about quite a few years, even an eternity, before any amendments are made to this Bill—the definition clause should be a little more understandable.

Why is it more understandable? I wish sometimes that one could annex to technical amendments such as this a copy of the clause they seek to amend, incorporating the amendments. The amendments seek to get rid of Clause 11, which defines “charitable purposes” or “charitable purpose” differently from the definition in Clause 2. Clause 1 defines “charity” in a way which is difficult to reconcile. It is reconcilable but only by dint of considerable legal subtlety. It is already difficult to reconcile Clause 1 with Clause 2. The last thing in the world one wants is for the unwary reader—that is to say he or she who does not plough all the way through the Bill—then to find that there is a different definition of “charitable purposes” in Clause 11. As I say, that in itself represents a significant practical improvement in the Bill because the definition of “charitable purpose” or “charitable purposes”—those two phrases are used in different places in the Bill—and the definition of “charity” itself are the linchpin definitions of the entire Bill.

I had hoped to simplify the Bill further. However, I received a communication from the Bill team which made clear that the extent of the use of the phrase “charitable purposes” or “charitable purpose” is unknown. The Committee may think it rather extraordinary that we have no place to which anyone, including the parliamentary draftsman, can go to be informed about all the uses of the phrase “charitable purposes” throughout our primary and secondary legislation. There is no such source of information. In the age of technical wizardry that defect could and should be resolved, not just for the benefit of the experts but for the many who will have to interpret this and many other statutory provisions in the future. As one of the letters that I received from the Bill team stated, there are what they call “known unknowns”—I like that phrase—which is another way of saying “We haven’t a clue”. The document continues:

“While we are able relatively easily to search the database of General Public Acts for references to ‘charitable purposes’, the same cannot be said of subordinate legislation (as defined for the purposes of clause 2), not all of which is stored in the available databases, or private Acts, hardly any of which are in the available databases”.

I have tabled my modest but, I think, significant amendment in the hope that the Government may say that they think it is an improvement but in the expectation that, given the complexity of the whole—I nearly used a Saxon word—business, they will need further time in order to clear the decks as regards simplifying these crucial clauses. I look forward to hearing what my noble friend has to say in replying to these amendments. I am grateful for the Committee’s patience.

[Baroness Finlay of Llandaff]

I rise briefly to support the spirit of what the noble Lord, Lord Phillips of Sudbury, has said because when people are setting up charities they often try to find ways around the complexity of registering a charity. There is an enormous number of charities and sometimes it is extremely difficult to be clear whether they truly are charities. I say that as a patron of several small charities from their outset. One often has a sense of when a “charitable purpose” really is a charitable purpose and when it is stretching the limits, but that has implications for donors and the Charity Commission. The reference to “known unknowns” is reasonable. In many aspects of life we know that new situations will arise but we do not know what they will be. The danger is that matters can be contested at a later stage. The noble Lord has thrown down a rather wonderful challenge to the Government. I look forward to hearing their response.