Small Business, Enterprise and Employment Bill

Debate between Lord Hodgson of Astley Abbotts and Lord Cope of Berkeley

Monday 19th January 2015 Grand Committee

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I am sorry that I am on the wrong side of the Moses Room this afternoon, but all the chairs were full when I arrived earlier, but never mind.

The amendment inserts a new clause after Clause 89 and is born of long frustration at the Government’s failure to force through a simple deregulatory change. If someone sets up a charity, it will normally be the case that it will be set up as a charitable trust; trustees will be appointed who will operate in a normal way under the supervision of the Charity Commission. The drawback of this is that the trustees have unlimited liability, which is not always particularly attractive. Therefore, to avoid that you can change from being a charitable trust to being a charitable company, which gives you the advantage of limited liability. However, that has a drawback because you then come under two regulators: the Charity Commission for your charitable activities and Companies House for your limited company activities. Both regulators require annual returns to be made to them and require largely overlapping information. If one was to draw a Venn diagram, one would find that there was relatively little space not covered by both regulators’ requirements.

In 2012, a report that I did for the Government recommended that the two forms could and should easily be merged. The Government accepted that recommendation, but I have to say that since that date progress has been glacial. In fact, that would be altogether too rapid a description of the progress that is being made. There has been lots of stuff about overlapping jurisdictions and incompatible IT systems, all of which to my mind smells of the long grass, if the long grass does smell. So I tabled this amendment to suggest that the Minister should be required to ensure that a common form is agreed between the two regulators, the Charity Commission and Companies House. I do not suppose for a moment that the Minister will accept it, but it is an attempt to draw attention to very slow progress in one part of her department.

How many companies the measure would cover is not exactly known, but the estimate is between 20,000 and 30,000 companies, which means about the same number of forms, if we could make this change. Deregulation requires a scalpel, not a meat axe, and this is a scalpel which I am offering to my noble friend on the Front Bench, as it would make a significant difference to 20,000 to 30,000 charitable companies, a difference to which the Government have been committed for some little time but which so far seems to be entirely stillborn as an idea. I beg to move.

[Lord Cope of Berkeley]

My Lords, I support this amendment but must declare an interest. I happen to be a trustee and director of just such a charitable company and charity as my noble friend suggests. I cannot pretend that it is a huge burden to fill in both separate forms but this is exactly the sort of deregulation that we should be looking for—and so do the Government, or at least I thought they did. How are we getting on with the glacial process, as my noble friend described it, of trying to harmonise these two forms?