Charitable Sector

Lord Chorley Excerpts

Tuesday 5th October 2010 Lords Chamber

[Lord Chorley]

My Lords, we have indeed a long list of speakers, but I am not surprised given the huge range of expertise in this place and the major role that the coalition Government see that the charitable sector can and indeed should play in promoting their objectives. I welcome the Minister’s wide-ranging speech introducing the debate and I start with two brief initial observations.

First, please do not overload the sector, please do not expect too much of it and please have regard to its limitations in both personnel and capacity—points that have all been made by many previous speakers. Secondly, I make a very different point: the charitable sector, both as a doer and as a source of funds, is very much wider than social services and local community activities. The sector covers education; it also covers our national heritage, the arts, the environment, landscape protection and preservation, scientific and social research—one could go on. That is surely the beauty of the breadth of definition of charitable activities which are subject to tax relief. Nevertheless, that wider aspect of the charity sector has hardly been touched on this afternoon. Indeed, the noble Baroness, Lady Young, who spoke about the environment, and the noble Lord, Lord Brooke of Sutton Mandeville, who talked more about the arts and heritage, were the only two speakers who have, as it were, gone beyond the social services.

My own interests lie, as your Lordships will probably have gathered by now, entirely in heritage and the natural environment, and I declare a number of interests. I was chairman of the National Trust for six years, but that was 15 years ago. I am a vice-president of the Council for the Protection of Rural England and the Friends of the Lake District. I am a former deputy chairman of the British Council and was a president of the Royal Geographical Society. I will stop at that point. I mention in particular the National Trust because it now has nearly 3.8 million members and hopes to achieve 5 million by 2020. When I was chairman, we thought we were doing pretty well when we got up to 2 million. It is also the biggest private landowner in England and Wales and it remains resolutely private—that is its strength—but can claim back tax on covenanted subscriptions and gifts on death of property of national importance, while the necessary endowment funds do not attract inheritance tax. These tax arrangements are crucial to the work of the trust, which is probably the largest volunteering organisation in the country.

In thinking of what I wanted to say this afternoon, the Library dug out for me some fascinating statistics. They show—this comes as no surprise—that the USA as a country has far the biggest charitable sector, both absolutely and as a percentage of GDP. The latter is 1.7 per cent and, given its huge GDP, the sums involved are enormous. Then there is a big gap; the UK comes in next at 0.73 per cent. There is another big gap below us and then we have a cluster of European countries. The interesting point is that the reason for this second gap is not absolutely clear to me except that, certainly in some countries, there are limitations on tax deductibility. Possibly history, definitions and tradition have something to do with it. Be that as it may, we should be very careful not to damage the British charity sector by ill thought-out tax changes or other legislative changes. I suspect there is a danger here in the education sector, where some schools recently lost their charitable status. I was, incidentally, intrigued to learn from an old Army friend who, when he retired, became a bursar of a well known charitable school that some prospective parents had the extraordinary notion that because the school was charitable the fees were tax deductible. What a lovely idea.

On a more serious note, I must draw attention—as indeed a number of other speakers have—to the Charities Aid Foundation, which has made the whole business of giving to a charitable organisation so much easier. Whoever thought of the CAF deserves a really big medal. Perhaps they got it; I hope so. While I am giving out bouquets I must mention our former Prime Minister, John Major. As the noble Lord, Lord Waldegrave, reminded us in the Times last week, it was he who invented the National Lottery and coupled it with setting up the Heritage Lottery Fund. As the noble Lord put it so succinctly, he has been the greatest of all British patrons of the arts in the late 20th century. Nor should we forget the resurrection of Lord Dalton’s proposals from the late 1940s with the setting up by the noble Lord, Lord St John of Fawsley, of the National Heritage Memorial Fund in 1980 and the work of its first chairman, Lord Charteris.

The Government are right to recognise the important role of the charitable sector in strengthening civil society, but I would be happier if they saw that sector as being wider than the social services as traditionally described. I hope that the Minister could endorse that. Either way, I also hope that he will accept the following three points or propositions.

First, on the funding barrier, charities such as the National Trust or the Campaign for National Parks are ready to rise to this challenge, but there is one significant barrier to the strengthening of civil society: funding. Spending cuts are going to be felt far beyond just the public sector. Cuts to grants will affect the future of some charities; in fact this is already happening. Yes, charities may be up for the challenge but they need robust financial support behind them. Secondly, the big society, from passionate individuals to large land-owning charities, is already doing much of the work involved in safeguarding and promoting the natural environment. Many of these non-state endeavours will continue to depend on state funding, but charity help on the cheap is not a viable alternative to a well funded sector. Thirdly and finally, this is not a panacea. The big society is attaining somewhat of a mythical status and being lauded by Ministers as a possible saviour to a wide range of challenges, including environmental ones. However it is very important that it does not cloud some of the challenging issues that, for example, Defra will need to grapple with in taking forward the natural environment White Paper, such as failing biodiversity or the disengagement of young people with the outdoors, both of which will need a national strategic approach and co-ordination. A strengthened civil society can help to meet these challenges, but only with a strong lead from Government and an adequately funded public sector.

The Minister has a herculean task in replying to all the points made this afternoon. I am sure that he is equal to the task, having admired the skill with which he introduced the debate.