Trade Union Bill

Lord Scott of Foscote Excerpts

Wednesday 16th March 2016 Lords Chamber

[Lord Mackay of Clashfern (Con)]

My Lords, I am very glad that the Government have thought it right to do this. I felt strongly that to constrain too strongly the time for which the ballot has authority was dangerous from the point of view of prejudicing resulting negotiations, which might take some time. In particular, I thought that to make the end independent of the view of the employer was unnecessary and really rather dangerous. I am very happy that the Government have moved this period up, from four to six months, and allowed the ballot’s authority to continue if the employer agrees to a further three months. This seems a very practical solution to a quite important problem.

[Lord Scott of Foscote (CB)]

My Lords, I rise simply to suggest that, where an important agreement, as this may be, is concerned, it ought to be an agreement in writing.

[Baroness Neville-Rolfe]

I thank my noble and learned friend Lord Mackay for his comments. It shows the value of scrutiny in this House. If I may, I will reflect on the point about it being in writing, but this is an area where we are finding a way through on the Bill.

Charities (Protection and Social Investment) Bill [HL]

Lord Scott of Foscote Excerpts

Tuesday 23rd June 2015 Grand Committee

[Lord Scott of Foscote (CB)]

My Lords, noble Lords need to bear in mind that each of the three words “how”, “when” and “where” is a preposition, and each word has a slightly different meaning. Since the intention of this part of Clause 1 is plainly to give as wide a discretion to the commission as is practicable, I respectfully suggest that all three words should be included, each meaning something slightly different. If the words were “how, when and where”, all would be covered.

[The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)]

My Lords, before I address the amendment moved by the noble Baroness, I should repeat my declaration of interest as a trustee of the Foundation Years Trust.

The noble Baroness began by suggesting that she might be seen as pedantic, and I think the other word she used was “fussy”. I would not dream of accusing the noble Baroness of being either. Indeed, the whole purpose of this Committee is to kick the tyres of this policy and to do precisely what we are doing, which is to examine every word, even thin little words such as “how”.

The noble Baroness began by making an excellent overarching point which I endorse wholeheartedly. We need to ensure that this Bill and all the measures within it are balanced. We are mindful of proportionality. We must also ensure that proper safeguards govern the measures and all the new powers in the Bill. I very much welcome the debate that we are going to have. I would also like once again to put on record my thanks to all noble Lords who spent so much time in the pre-legislative scrutiny committee shaping the Bill before us today.

Taking a step back, the Charity Commission asked for these powers following criticism from the NAO and PAC about its regulatory approach. These powers were a specific recommendation of the NAO in its December 2013 report. Further calls for tougher powers for the commission came from the extremism task force in December 2013 and from the Home Affairs Select Committee.

We consider the Bill is a “must have” because it forms just one part of a multistrand approach to addressing criticisms of the Charity Commission by ensuring that it has the tools it needs to do the job that we and the public expect of it. One of these powers is the power to issue an official warning. As my honourable friend the Minister for Civil Society said to the Joint Committee in pre-legislative scrutiny, this is one of the most important new powers in the Bill. An official warning could be issued to a charity trustee or to the charity itself where the Charity Commission considers there has been a breach of trust or duty or other misconduct or mismanagement. The power would enable the Charity Commission to publish a warning, as we have been discussing. The Charity Commission has said that it would not publish all warnings, which is an important point to note. The decision to publish would be in line with its current policy on publishing the announcement of statutory inquiries, which are considered on a case-by-case basis. The Charity Commission would not publish an official warning if it considered that it would not be in the public interest to do so.

Let me give the Committee two brief examples of when the Charity Commission might consider issuing an official warning. Fist, a charity is consistently a little late in submitting its accounts. An official warning would remind the trustees of the seriousness of their non-compliance. Secondly, a charity makes unauthorised payments to a connected company or one that benefits a trustee. The size of the sums involved means that it would be disproportionate for the commission to take firmer action, but it could issue an official warning on future conduct.

As the Committee would expect, and as I mentioned, the power is accompanied by a number of safeguards; I know these were discussed in the committee, and others have been added since then. The first is as follows: the Charity Commission must give notice of its intention to issue a warning to the charity and its trustees. The notice must specify a number of matters, including the grounds for issuing the warning and any action that the commission considers should be taken by the charity to rectify the breach that has given rise to the warning. The notice must specify a period for representations to be made about the proposed warning, and the commission must take account of any representations before it issues any warning. An official warning could also highlight the likely consequences of any further non-compliance, which would be likely to require a more significant intervention by the regulator.

This is the one new regulatory power in the Bill that we and the Charity Commission expect may impact on more charities than the other proposed powers. Most of the powers in the Bill are targeted at serious, deliberate abuse of charity. The official warning power would be used more frequently by the commission as a more reasonable and proportionate way of dealing with breaches where the risks and impact on charitable assets and services are lower.

The Charity Commission’s current policy is to consider publishing reports of its non-inquiry work where, first, there is significant public interest in the issues involved and the outcome and, secondly, there are lessons that other charities can learn from them. The commission has explained its proposals for publishing official warnings in evidence to the Joint Committee on the draft protection of charities Bill. In its written evidence, it said:

“We do not intend to publish all warnings. Whether or not we do so will, in line with our current policy on publishing the announcement of statutory inquiries, depend on whether it is in the public interest. We would not publish an official warning if we consider that it would not be in the public interest to do so”.

It went on to say that it would follow its existing practice of inviting comments on factual inaccuracies, which it would take into account, and would publish guidance on the criteria that it would use in deciding whether or not to publish an official warning.

The requirement for certain information to be specified in the notice of an official warning was added in response, as I said, to a recommendation from the Joint Committee on the draft protection of charities Bill. In terms of where the official warning would be published, the Charity Commission already publishes around 25 non-inquiry regulatory case reports on its pages on www.gov.uk. Details can also be published alongside the charity’s register entry. It also summarises its regulatory casework and, in particular, identifies each year wider lessons that charities can draw from it in an annual report. To pick up the noble Baroness’s point about publication, only in certain cases might the commission consider issuing a press release, and this is always shown to the charity in advance. The commission will also share with the charities where it is to be published.

As to when the commission would publish the official warning, this would always be after the period of representations, and a period for the commission to consider any representations made by the charity. There may be some cases where the commission needs to have further engagement with the charity before it can publish an official warning, based on the representations that it receives from the charity. So it is not possible for the commission to specify exactly when it would publish an official warning at the point at which it issues a notice of intention. However, it would tell the charity before publication. If the charity needed to have such discussions and needed to have an extra time period, I am sure that the commission would listen carefully and respond accordingly. The commission already has in place a procedure and published policy that works which announces the opening of inquiries, and it has had no complaints from charities about the process. The commission would engage with the charity and would not publish without letting them know but, as I have said, it would not be possible to do this in the original notice of intention.

Any published details of warnings would have to be removed by the commission after a period of time. Its current practice in relation to inquiry and case reports is to archive them after a period of two years. The commission will set this out in its guidance on official warnings, which will be published before the power is commenced. As the noble and learned Lord, Lord Hope, suggests, the amendment might well narrow the requirement if it were brought into effect.

I am sympathetic to the intention behind, and I agree with the spirit of, the noble Baroness’s amendment to provide further clarity around the publication of an official warning. I think that we agree in principle and I hope that I have been able to offer some reassurances about the way that the process would work. As I have stated, the criteria would be published and the commission would engage with the charity throughout. However, logistics and the nature of the response from the charity to the notice would mean that it would not be able to say when it would be published at such an early stage. On that basis, I hope that the noble Baroness will be able to withdraw the amendment.

--- Later in debate ---

[Lord Scott of Foscote (CB)]

My Lords, I think I had an invitation to speak on this from my noble and learned friend Lord Hope. I have puzzled a little bit over the object of Amendment 11. There is a reference in it to where there is,

“sufficient reason to believe there is a collective failure of all trustees to ensure the safety and protection of children who are direct beneficiaries of the charity”.

The children may be the objects of the charity in the sense that the charitable money is meant to go to them. However, if all that is intended in the charitable trust in question is that charitable money be applied for the benefit of the children, it is a little difficult to see how the safety and protection of the children comes into it. Any misuse of the funds of the charity would be a breach of trust. You do not need a provision in the Act to say so. That could be remedied at any time by any of the trustees.

I find it difficult to quite understand what is meant by a,

“failure of all trustees to ensure the safety and protection of children”.

If the children are the objects of the charity in the sense that the funds must be used for their benefit, it is not the duty of the trustees to ensure their safety and protection. Their safety and protection may be put at risk by any number of different means that have nothing whatever to do with the objects of the charity. I am little puzzled by the intention behind that as it stands.

[Lord Bridges of Headley]

My Lords, following what the noble Baroness, Lady Hayter, said in response to the last amendment, I will just put on record that I would certainly not wish to give the impression that I am complacent about these issues. I completely understand that we need to debate and discuss them. As I said right at the start, we need to kick the tyres here. I just wanted to make that perfectly clear.

Let me start by dealing, first, with the proposed new clause on serious incident reporting. It might help if I explain briefly the position as it currently stands. The Charity Commission already requires serious incident reporting from charities with an income of over £25,000 as part of annual return requirements and encourages all charities to report serious incidents immediately as a matter of good practice. The Charity Commission’s annual return regulations require charity trustees to sign a declaration each year that there have been no serious incidents in the charity in the year or to give reference to any serious incident reports already made to the regulator and also report serious incidents that have not previously been reported.

On the lists that have been referred to in the debate, I do not think that the order of the listing suggests how serious the Charity Commission thinks those issues are. However, I can tell the noble Baroness, Lady Hayter, that the Charity Commission will look again at the issues it defines as serious.

There are various other legal requirements on charity trustees to report certain matters immediately. For example, there is a duty under terrorism legislation to disclose information about certain possible terrorist financing based offences to the police. Specifically on safeguarding, the Safeguarding Vulnerable Groups Act 2006 places a requirement or legal duty on employers and volunteer managers of people working with children or vulnerable adults to make a referral to the DBS in certain circumstances where a person has been dismissed or removed from working with children or vulnerable adults. That is in addition to any referral to a body such as a local authority safeguarding team.

As regards charities themselves, charity trustees are ultimately responsible for safeguarding within their charity. The Charity Commission’s role in safeguarding is to ensure that charity trustees take steps to protect and safeguard their beneficiaries. This means that charities working with vulnerable beneficiaries must have in place appropriate safeguarding policies and procedures, and must monitor them on an ongoing basis to ensure they are effectively implemented. The Charity Commission can and does take action against charities and trustees where they fail to do so but it is not the role of the Charity Commission to investigate suspected abuse. If there are allegations of abuse of vulnerable beneficiaries, the Charity Commission expects trustees to handle them properly and, where appropriate, report allegations to the police, social services or other agencies. Where the commission itself has serious concerns, it can and does refer them to the police or other agencies.

As I said at Second Reading, the Bill is about striking the right balance. While on the face of it there are many attractions to imposing a new serious incident reporting duty on charities, we have to acknowledge that it would be a new reporting requirement that would affect tens of thousands of small charities. Furthermore, and this is an important point, there is also the concern that the charities that would meet their obligations under a duty to immediately report serious incidents are those charities that would do so as a matter of good practice, and have already taken appropriate action to address the issue. Charities bent on abusing their position of trust would be unlikely to report the matter to their regulator. The danger would be that we would simply create a lot of red tape for the vast majority of honest charities, while those poorly managed or involved in abuse would ignore the requirement.

Under the amendment, diligent trustees might consider it necessary to report to the Charity Commission every time there was a risk to beneficiaries or the charity’s reputation. It is not hard to see how the commission could be inundated with queries and unnecessary reports. There is also the question about whether the commission would be able to cope, and what it would do with such a volume of reports.

The Government are committed to minimising regulatory burdens for charities, particularly small charities. We do not want to impose new burdens, particularly when the implications for the commission and the impact on charities have not been fully considered.

I do not want to appear overly negative towards this amendment as I believe there is much to be said for it, but I hope that the noble Baroness will also accept that there are downsides and that we do not want to tie up small charities with red tape. I hope that on that basis she will feel able to withdraw her amendment.

--- Later in debate ---

[Baroness Hayter of Kentish Town]

That is helpful. Having been reassured about the ability to take action where there is a collective failure, we probably will not pursue that. We may, however, want to come back on the bar on reporting.

[Lord Scott of Foscote]

I wonder if the noble Baroness could help me with one point. If a scholarship is set up for a particular school, the money is charitable money and is used to provide scholarships for people who perhaps otherwise would not be able to go to the school. I find it extraordinary to suppose that the trustees of the charity must examine what is going on in the school to see that there are no misdemeanours among the staff towards the boys or things like that. If that is the intention of the proposed new clause, it seems to me that it is full of difficulties. If that is not the intention then the wording is not quite right.

[Baroness Hayter of Kentish Town]

If they are the trustees of the school they have that responsibility now.

[Lord Scott of Foscote]

They are not trustees of the school; they are trustees of the charitable trust that is funding the scholarships.

[Baroness Hayter of Kentish Town]

The wording may not be right, but we are talking about where, basically, they are running an establishment, such as a music school. They are the trustee running the school; they therefore have these responsibilities. They cannot say, “I am a trustee, it is not my responsibility”. They have the responsibility to ensure that they have the right management and that they are trained correctly. It is some time since I have done that, but they have to have those policies in place. This group of people, who are running an organisation either for children or for vulnerable people, has that responsibility.

The bit that we are trying to add is where it has come to their notice—or they have not asked the question right—that abuse is going on in those areas where they have responsibility. We want it to be a duty on them, not just in guidelines, that they should report that abuse. I am not a draftsperson, but what we are driving at is probably clear. It is raising the bar of when they need to report. The guidelines are already there, the duties are on them, and what we are hearing is that sadly some trustees fail to report what they should. For the moment, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Hope of Craighead]

I shall speak also to Amendment 9 which is in my name and is grouped with Amendment 4. The amendment takes out the words “privy to” in the two places to which these amendments refer and inserts the words “participated in”. This is really a discussion about the use of language. The background can be narrated by referring to paragraph 122 of the committee’s report, in which we mentioned that a number of witnesses expressed concerns about the wording of this clause. Among the phrases referred to are “privy to the misconduct or management” and “facilitated it”, which we decided did not require further comment.

However, we picked up “privy”, which had been drawn to our attention by, as footnote 157 states, four charities: Bond, Joseph Rowntree Charitable Trust, Muslim Charities Forum and NCVO, which all expressed concern about the wording. “Privy” is a curious word and really rather antique. In the Shorter Oxford English Dictionary one of the definitions is,

“sharing in the secret of a person’s plans”.

I am not quite sure what that means in this context. The other possible meaning is,

“a person having a part or an interest in an action, matter or thing”,

which perhaps comes closer to what the draftsman has in mind.

When we were trying to find an equivalent formula, we suggested, in paragraph 125 of our report, “aware of”, but there may be more in it than that. There may be something more active than simply knowledge, which is why I am now suggesting “participated”, which is actually doing something to assist the act of misconduct or whatever it is. Either way, I suggest that “privy” already looks antique, and if this Bill is going to survive for a number of years, it will become increasingly so. It may be in the spirit of the present Government, as expressed by Mr Gove yesterday, to try to modernise and clarify language, and here is an opportunity to try to do the same thing. I offer the words “participated in” as an alternative to what we put into the report, but the basic suggestion is that something should be done to clarify what “privy” means.

This is an important clause because it deals with a situation where these very important powers may be exercised. Not only does the Charity Commission need to know what it should be driving at but the people against whom the powers are being exercised are entitled to know as well. I beg to move.

[Lord Scott of Foscote]

I entirely support the amendments proposed by my noble and learned friend Lord Hope for the reasons he has given. As he said, in the Oxford dictionary there are two alternative definitions of the expression “privy to” and neither would be appropriate in this part of the Bill. On,

“sharing in the secret of a person’s plans”,

I suppose that spouses share in the secrets of the plans of their partners, but that does not make them people who ought to be subject to the provisions of this Bill. The other meaning is,

“a person having a part or an interest in an action, matter or thing”.

“Interest” is not appropriate. The substituted words suggested by my noble and learned friend—“participated in”—seem much better and should be accepted.

[Baroness Barker]

My Lords, as a member of the committee, I want to support the noble and learned Lord, Lord Hope. I love going to Hampton Court. When you go there, particularly if you are a kid, you get to understand how this term came to be. We are not in Tudor times but it is a very important matter. A number of the charities we talked to in the course of our discussions work internationally. They work in very difficult situations, such as in war situations around the world, and at times it can be quite difficult to ascertain the extent to which the trustees know what is happening in their charities.

On the last set of amendments, the noble Baroness, Lady Hayter, tried to take us to a place where we could understand the difference between management and governance. We are talking very much about governance here, not about the people who run or manage charities and are therefore close to the day-to-day activities of those charities. If the question is about the extent to which trustees in a position of governance need to know what is being done by their charities or can inadvertently be assumed to have known that something adverse happened, then that is absolutely wrong.

I am always interested in things that clarify governance for trustees. Governance is very difficult to pin down. This change of language is an attempt to help the trustees of today understand that distinction between governance and management, and that is laudable.

Government’s New Approach to Consultation: “Work in Progress” (SLSC Report)

Lord Scott of Foscote Excerpts

Monday 11th March 2013 Grand Committee

[Lord Scott of Foscote]

My Lords, I congratulate the noble Lord, Lord Goodlad, on securing this debate. Formally, it is a debate on the report of the Select Committee of which he is the very efficient chairman and of which I have the honour to be a member—as does practically every other noble Lord in the Room. I agree with everything that has been said about the report and the importance of consultation, but I will say a few words of my own.

The purpose of consultation must be to improve the quality of proposed legislation, whether primary or secondary. It is much more important in relation to secondary legislation than to primary. With primary legislation, a Bill will have gone through the House of Commons and will go through its stages in the House of Lords. It will become public property. From time to time there will be comments in the newspapers. Members of the House will receive letters from interested persons, sometimes expressing support and sometimes expressing misgivings. They will be fully informed in that way about the merits and demerits of the proposed primary or secondary legislation before the matter comes to a head.

With secondary legislation, what is the opportunity for members of the public to make those sorts of observations—of support or criticism, as the case may be? If an affirmative resolution of the House is required, in due course the legislation will come before the House. Either it will start in the Moses Room and go to the Chamber or it will be dealt with entirely in the Chamber. However, the notice might not be sufficient to alert interested members of the public to what is afoot. With secondary legislation that requires a negative resolution to prevent it coming into effect, there will be no notice to the public at all. Every now and again, a regret Motion may be tabled. In that way a debate of which the public may become aware will take place, but that is a relative rarity. Secondary legislation that is going to come into effect without any express resolution, and which requires a negative resolution to prevent it coming into effect, is much more common. How, without prior consultation, are defects in secondary legislation of that negative character going to become apparent and be acted upon? Prior consultation, in my respectful opinion, is essential in all cases where the statutory instrument in question is going to come into effect unless there is a successful regret Motion preventing it coming into effect.

The importance of that is obvious and does not need overstating. The importance of the consultation is, first, that defects not necessarily apparent to the Minister or civil servants who have drafted the statutory instruments in question can be brought to their attention and revisions can be made before it is too late for them to be made. The pros and cons of the proposed secondary legislation can be brought to the attention of those who will be affected by the legislation. They may be affected because their interests will be involved by what is proposed. They may be affected simply because they are very knowledgeable about the subject matter of the proposed legislation. In either case, they are people whose comments may be very valuable to the Government for the purpose of obtaining the effective and sensible legislation that must be the aim of the Executive.

The importance of consultation cannot be overstated. However, effective consultation requires that there be communication with the right people. As I have said, they will be people with a particular knowledge of the subject in question and whose interests are likely to be affected by the proposals that will be embodied in the statutory instrument that is under review. They are the people who the Government should consult with before drafting and putting forward the proposed secondary legislation. There is no reason why that cannot be done but, if it is going to be done, it must be done effectively, and if it is going to be done effectively then it must be done with sufficient time for two things to happen. First, there must be sufficient time for the persons who are being informed of the proposals—the persons with whom the consultation is taking place—to think about it and draft a response. Secondly, there must be time for the Government to consider the responses and to act on them as they may think appropriate.

The proposition that there can be a consultation in two weeks is absurd. That suggestion is no more than a request, perhaps, for a fig leaf of consultation that can be held up for public relations purposes as being a consultation when in fact, because of the absence of any time adequate for a proper consultation, it will be nothing of the sort. It will not deserve the description of a consultation. The proposition that two weeks might be adequate is, in my respectful opinion, laughable. It demeans a Government who put it forward as sufficient.

The proposal that there be a flexible time limit is of course acceptable in principle. Twelve weeks as the norm has been satisfactory, but maybe there are cases where that could be abridged, or shortened to some extent. A minimum of six weeks appears to me to be a sensible limit to place on the abridgement possibilities.

Subject to those requirements of genuineness in the consultation process, consultation might be described as being plainly a good thing. However, it is not a good thing if inadequate time is allowed for responses to be given or for thought to be given to them. If insufficient time is allowed, what purports to be a consultation becomes no more than a public relations exercise in hypocrisy. That, plainly, cannot and should not be supported by the House.

I respectfully endorse the suggestions in the report of the committee—of which, as I have said, I have the honour to be a member—of a minimum period of six weeks. I urge the Government, if not to adopt the number of weeks in question, at least to adopt the principle of the essential requirement of time for response and time for thought for anything that is going to be an adequate consultation.

House of Lords: Appointments

Lord Scott of Foscote Excerpts

Tuesday 9th October 2012 Lords Chamber

[Lord Steel of Aikwood]

My Lords—

[Lord Scott of Foscote]

My Lords—

[Noble Lords]

Steel!

[Lord Scott of Foscote]

I am grateful to the noble Lord. Does it remain the Government’s intention that when members of the Supreme Court retire, those who are not already Members of this House will be invited to become Members of this House?

[Lord Wallace of Saltaire]

My Lords, those Supreme Court judges who were Members of this House before the Supreme Court was separated from it are currently on leave of absence. I am not aware that the Government have any definite position on what will happen to those appointed to the Supreme Court since it was separated from this House.

The Steel Bill has clearly now become extremely popular with a number of Members of this House. I am not entirely sure whether it is the emasculated Steel Bill which people wish to promote or the original Steel Bill. I have worked through several efforts to get the Steel Bill through the House, but it has not received much welcome in particular from a number of hereditary Peers.