Charities Bill [HL]

Baroness Smith of Basildon Excerpts

Thursday 5th May 2011 Lords Chamber

[Baroness Smith of Basildon]

My Lords, although shorter than usual, this has been an enjoyable debate. It has shown this House at its best and the depth of knowledge, commitment and expertise of its Members. I thank the Minister for her detailed and helpful introduction and explanation of the consolidation Bill.

I welcome this consolidation. As we have heard, it brings together the provisions of the existing main charity legislation. The Recreational Charities Act 1958—I am not entirely clear what a recreational charity is as opposed to any other charity—the Charities Act 1993 and the relevant, although not all, provisions of the 2006 Act are brought together into one piece of legislation. I welcome the assurance of the noble Baroness, Lady Verma, that there are no new policy issues involved and that no changes have been introduced. This is exactly what it says on the tin—a consolidation Bill designed to simplify existing legislation.

Like all noble Lords who have spoken today, I thank the Law Commission and congratulate it on its work, as I do the Office for Civil Society, the former Office of the Third Sector and the Charity Commission, which also consulted on this prior to the official formal consultation.

As noble Lords will know, the consultation was launched in September 2009 and closed in December 2009. I should confess to your Lordships’ House that at that time I was the Minister for the third sector, with responsibility for this legislation. I was keen to see progress before the last election but in those few months between the end of the consultation and the dissolution of Parliament in April 2010, there was no time in the legislative timetable—which was certainly of regret to me. Another year has passed before we have found time for debate but I certainly welcome the legislation being brought forward.

On the consultation, I was keen to refamiliarise myself with the consultation responses and am disappointed that they are no longer available on the website. It may be helpful for further consideration of the Bill, and would have been helpful for today’s debate, if they were made available. Having said that, I understand, and the Minister made it clear, that there was broad support for the Bill. As far as I am aware, there were no substantive objections to issues in the Bill before us today.

There have clearly been widespread concerns that, since the first legislation was introduced in 1958, charity legislation has over time become more complicated. That can be a deterrent and put off those who wish to contribute to society through charities and charitable work. The noble Lord, Lord Hodgson, described the previous legislation as “unfriendly”. That is a good description for those trying to wade through the legislation or to set up a charity or conduct themselves as trustees. It is right to pay tribute, as other noble Lords have done, to not just those who work for charities and the wider sector but also the, in many cases, unsung trustees. Being the trustee of a charity can be a huge responsibility. We should be grateful to them, many willingly and some not so willingly taking on these roles out of a sense of duty and responsibility. We have an obligation as legislators to make it as easy for them as possible to take on the responsibilities that they wish to and to play a role in society. Consolidating the law in a way that seeks to reduce complexity and bring the laws together in one place can be extremely helpful.

One general point that other noble Lords have made is that we should not be overly confident that this is going to make life much easier for charities. Looking through the Bill and its schedules, it is long and detailed, with huge implications and responsibilities. It will not be that much more easily understood by the lay person, however much we in your Lordships’ House try to make it so. Those noble Lords in the House for Questions yesterday may have heard the Question asked by my noble friend Lord Boateng: whether those who wish to set up charities should be able to do so without needing a lawyer. I noticed at the time that the noble Lord, Lord Phillips of Sudbury, gave a wry grin at that comment. That wry grin was explained when he spoke on some of the clauses of the Bill: it is almost impossible for the lay person to understand charity law in detail or to navigate their way through without a lawyer.

Charity law has, of necessity, to be detailed. It seeks to protect the donor and the public, and also seeks to regulate the charity’s activities, protect its integrity and that of its trustees. Looking at the Table of Origins and the involvement of different Government departments, the legislation is a response to issues that have arisen. This is a hugely complicated area but the legislation exists to bring order and, I hope, logic to that complexity. As welcome as this is—I warmly welcome the legislation coming forward at this point—there still remain some uncertainties for charities which I hope the Minister will be able to comment on. The noble Lord, Lord Hodgson, referred to some of these as well.

I commented that the Bill brought together existing legislation, including the relevant provisions of the Charities Act 2006—as other noble Lords have mentioned. I was grateful for the Minister’s explanation at the beginning as to why, as part of this consolidation, we have not got to the parts of the 2006 Act that have not been activated and which would make the Charity Commission the lead regulator for public charitable collections. As the noble Lord, Lord Phillips, said—I agree with his comments and will also look at Hansard carefully—there seems to have been a change of policy by the Minister on that issue. I would be interested to know, if the Government’s intention is not to proceed with those provisions in the 2006 Act, whether there will be a further consultation with those charities. My understanding is that as part of this consultation a number of organisations welcomed those provisions and wanted to see them included in the legislation. The Minister seemed to say that it was unlikely that they would come forward. If that is the case, will there be a further consultation on this? She will also be aware—and her own comments hinted at this—that one reason why that is not included today is because cuts in the Charity Commission’s budget make it difficult for it to undertake further responsibilities. If that is the prime reason, the House would appreciate some further information, but I may have misunderstood that.

The other provision from the 2006 Act that has not yet come into force is on the charitable incorporated organisations. It is in this legislation and is widely welcomed; there is no dispute over how widely welcomed it is. I may be missing something, but could the Minister explain why the CIOs are in this legislation while the other measures that we mentioned on fundraising are not? Is that a policy decision or a funding decision for the Charity Commission rather than a technical legal point?

I agree with the noble Lord, Lord Hodgson of Astley Abbots, about the uncertainty around the 2006 review of the Charity Acts. The commitment is that the review would take place in 2011. I fully understand, as the noble Lord, Lord Phillips of Sudbury, said, that there would be a reluctance to delay consolidation legislation, because that would mean that much-needed legislation would come through the statute books. But there may be changes and suggestions for changes following the review that will make this legislation out of date very quickly. That is the concern. After we have gone to the effort, in which all the organisations have been involved, of ensuring that we have comprehensive legislation, if the review takes place this year it will be out of date within the year. Given that the commitment has been made to have the review on the legislation go through now, can the Minister assure me that following the review, should changes be sought that benefit charities and civic society, the necessary parliamentary time will be made available as quickly as possible to ensure that we do not have legislation on the statute books advising charities that will be out of date so quickly?

The third uncertainty, although I shall not overly dwell on it, is about the funding difficulties faced by charities for both national and local funders and the impact that it is having on their ability to deliver and provide support for the big society. We have heard the comment from the noble Lord, Lord Phillips of Sudbury, that almost every Member of your Lordships' House is involved in a charity in one way or another, which is perfectly true. So your Lordships' House is only too aware that the charities and the wider third sector have been the backbone of the big society, although it has not been called that, for many years. There is now an increasing anxiety and uncertainty of what that means for them, and how they can continue to fulfil that role against a backdrop of funding cuts. Those charities will broadly welcome the legislation before us today because they know that it seeks to address some of their concerns and the problems that they have with legislation and simplify the legal requirements on them. We also welcome it and hope that the co-operation and support shown in the legislation continue in other areas of government policy, in recognition of the enormous power for good and the practical support that charities provide to communities across the country.