Charities Bill [HL]

Baroness Verma Excerpts

Wednesday 23rd November 2011 Lords Chamber

Moved by

[Baroness Verma]

Clause 2, page 2, line 12, at end insert “
“(4) This section is subject to section 11 (which makes special provision for Chapter 2 of this Part onwards).”

[Baroness Verma]

My Lords, I hope to be able to keep my contribution relatively short. I will give a brief explanation of the drafting amendment that we have put down. I will also mention the review of the Charities Act 2006, which will include consideration of the substantive issue that lies behind this amendment.

The amendment responds to the point that was raised in Committee by my noble friend Lord Phillips of Sudbury. As the law stands, there are two subtly different definitions of charitable purpose that are used in different contexts. The definition of charitable purpose in Clause 2 is a definition which applies generally; that is, in legislation generally and in documents such as trust deeds, and in England and Wales as well as, for certain purposes, Scotland and Northern Ireland. The definition of charitable purpose in Clause 11 has a much more limited application. It applies only in England and Wales and only to provisions derived from the Charities Act 1993.

The initial suggestion of my noble friend Lord Phillips was that the two definitions should be combined into one. This was not an option, however, as the rules for consolidation Bills constrain the drafter from making any changes that would alter the meaning of the current law, so both definitions of charitable purpose had to be consolidated into the Charities Bill.

The remaining concern of my noble friend Lord Phillips was that a reader of the legislation could miss the fact that there are two subtly different definitions of charitable purpose that apply in different contexts. He suggested certain drafting amendments to address this point. The amendment we have put down deals with the issue more simply by placing a flag at the end of Clause 2 to alert the reader to the existence of the separate definition of charitable purpose in Clause 11. As I said during Committee stage, we recognise that there is a more fundamental point that ought to be considered; namely, whether it is possible to have one definition of charitable purpose rather than the two that exist in the current law. Although we could not consider such a change in this Bill, I do undertake for it to be included in the review of the Charities Act 2006.

My noble friend Lord Hodgson of Astley Abbotts has been appointed to undertake the review of the Charities Act 2006. He has recently chaired the red tape task force, the sensible and practical recommendations of which have been widely welcomed by the charity sector. Also, as an opposition Front-Bench spokesperson during the previous Administration, he led on the Companies Act 2006 and the Charities Act 2006. His significant experience makes him ideally suited to lead this review and I am sure that your Lordships will join me in welcoming his appointment.

The aims of the review will be twofold: to report on the operation and effectiveness of the provisions of the Charities Act 2006; and to consider whether further changes could be made to improve the legal and regulatory framework for charities. The terms of reference are broadly drawn to reflect these aims. I have placed a copy of the terms of reference in the House Library and they are available on the Cabinet Office website. The review is expected to report before Summer Recess in 2012 and a copy of the report will be laid in Parliament.

My noble friend Lord Hodgson has confirmed that he will consider the concern of my noble friend Lord Phillips about the two definitions of charitable purpose as part of his review. In the mean time, although this amendment will not resolve the underlying problem, it will ensure that readers of the legislation are aware that there are two definitions of charitable purpose. As such it is helpful. I beg to move.

[Lord Phillips of Sudbury]

My Lords, I am grateful for what my noble friend the Minister said in respect of the amendment in her name. I can only concur with and applaud it, because, in my view, the Bill as drafted, given the limitations of consolidation statute, was none the less a big elephant trap for any non-charity lawyer who waded into the same, not realising that the definition in Clause 2 was subtly but significantly different from the definition in Clause 11 of the same phrase. It may seem odd for a charity lawyer to have, as a near-passion, the wish to try and keep charity law as simple, direct and plain as possible; but that has always been my position. It was during the course of the Charities Bill in 2006, when I led for these Benches, and remains an abiding passion in an age that seems to get more and more complicated and trammelled by regulation and so on. Therefore, I am glad at least that we have got this in the Bill. I perfectly understand the limitations of these consolidation statutes and therefore cannot complain that something more has not been done. I am grateful that it will be on the agenda of my noble friend Lord Hodgson; whom I congratulate, if that is the right word, on being appointed to undertake this review. I am glad that I was the author of this review clause in the 2006 Act. The noble Lord can blame me.