Charities (Protection and Social Investment) Bill [Lords]

Anna Turley Excerpts

Tuesday 26th January 2016 Commons Chamber

[Anna Turley (Redcar) (Lab/Co-op)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 2—Disposal of assets—

“The Charity Commission shall ensure that independent charities are not compelled to use or dispose of their assets in a way which is inconsistent with their charitable purposes.”

New clause 3—Power to make representations—

“(1) A charity may undertake political campaigning or political activity in the context of supporting the delivery of its charitable purposes.

(2) A charity may campaign to ensure support for, or to oppose, a change in the law, policy or decisions of central government, local authorities or other public bodies.”

New clause 4—Power to hold hearings on fundraising regulation and charity activity—

“(1) The Commission has the power to hold public hearings with representatives from charities, charity trusts and other relevant bodies on fundraising regulation and charity fundraising activities.

(2) Representatives appearing at the public hearings specified in subsection (1) are protected by legal professional privilege.”

This amendment requires the Charity Commission to hold annual hearings on fundraising regulation and the workings of charities and provides participants with the protection of legal professional privilege.

New clause 5—The Charity Commission as primary guarantor of the regulatory system for fundraising—

“(1) Section 69 of the Charities Act 2006 (Reserve power to control fund-raising by charitable institutions), which inserts section 64A into the Charities 1992 Act (Reserve power to control fund-raising by charitable institutions) is amended as follows.

(2) In subsection (1) for “Minister” substitute “Charity Commission”.

(3) After subsection (8) insert—

“(9) The Charity Commission shall report annually to the Minister on the exercise of its powers under this section.

(10) On reviewing the annual report or if the Secretary of State considers the Commission is not effectively exercising its function as guarantor of the regulatory system the Minister may himself exercise the powers under this section.””

This amendment makes the Charity Commission the primary regulator of charities fundraising activities, requires the Charity Commission to report annually to the Cabinet Office on its regulation of charitable fundraising, and allows the Government to intervene in this regulation as a last resort.

Amendment 9, in clause 1, page 1, line 12, at beginning insert “Subject to subsection (3)”.

Amendment 8, page 1, line 12, leave subsection (2) and insert—

‘(2) The Commission may issue a warning to a charity trustee, a trustee for a charity or a charity in any way it considers appropriate but may not publish a warning to a wider audience.”

Amendment 10, page 1, line 15, at end insert—

‘(2A) If the Commission decides to publish a warning under subsection (2) it must do so in a manner which does not identify the charity, or charity trustee, in relation to which the warning is issued.”

Amendment 11, page 1, line 16, after “give” insert “at least 14 days”.

Amendment 12, page 2, line 6, leave out subsection (b) and insert—

“(b) such advice or guidance that the Commission considers may assist the charity to remedy the conduct which gave rise to the warning, as referred to in (a) above.”

Government amendment 2.

Amendment (a), line 10 at end add—

‘( ) If the Commission publishes notice that a warning has been withdrawn under subsection (2), the notice must state the reasons for the withdrawal.

( ) No record of a warning withdrawn by the Commission should be held on the Register of Charities.”

Government amendment 3.

Amendment 1, in clause 9, page 10, line 2, at end insert—

‘(22) Before this section comes into force, the Secretary of State shall lay a report before Parliament on the impact of the extension of the disqualification framework on—

(a) people with criminal records who are trustees of, or employed by, charities, and

(b) charities which work with, or employ, ex-offenders.

(23) The report shall include, but not be limited to—

(a) an assessment of the number of people employed by charities who will be affected by the extension of the disqualification framework to cover senior management positions,

(b) an assessment of the number of people who are trustees of, or employed by, charities who will be affected by the extension of the list of specified offences for which people will be automatically disqualified from being a trustee of, or a senior manager in, a charity,

(c) an assessment of the impact of the new disqualification framework on former offenders who are seeking, or intend to seek, employment in the charitable sector, including on their recruitment, retention, career prospects and long-term rehabilitation and resettlement,

(d) an assessment of the impact of the new disqualification framework on former offenders who are currently employed in the charitable sector, including on their retention, career prospects and long-term rehabilitation and resettlement,

(e) an assessment of the impact of the new disqualification framework on people with criminal records who are trustees or employees of charities which are partners in, or are contracted by, community rehabilitation companies (CRCs) and its impact on the successful running of those organisations,

(f) an assessment of the effectiveness of the existing waiver process provided for under section 181 of the Charities Act 2011,

(g) an assessment of the impact of the new disqualification framework on the number of applications for waivers to the Charity Commission,

(h) a description of how the working group set up by the Charity Commission on the waiver process will be constituted, how it will be resourced, what timelines it will be working to, its working method and intended outputs, and how it will work in consultation with people with criminal records and charities that work with, or employ, ex-offenders,

(i) a description of the criteria the Charity Commission will adopt in considering applications for waivers, and the weight it will attach to the views of the trustees of the charity or charities concerned,

(j) a description of how the waiver process will operate in relation to prospective candidates for senior management positions in charities, including the timescales for decisions and mechanisms to ensure that ex- offenders do not suffer indirect discrimination as a consequence of delays in assessing applications for waivers while a competitive recruitment process is underway,

(k) an assessment of the impact of the new disqualification framework on the resources provided by the Charity Commission to administer the waiver application process.”

This amendment would require the Secretary of State to lay before parliament a report on the impact of the extension of the disqualification framework on people with criminal records who are trustees of, or employed by, charities, and on charities which work with, or employ, ex-offenders before the section came into force.

Amendment 13, in clause 10, page 10, line 7, after “person” insert “or persons”.

Government amendment 4.

Amendment 14, page 10, line 35, leave out

“(either generally or in relation to the charities or classes of charity specified or described in the order)”

and insert

“, as defined by the Commission in a specific document to be published after consultation and renewed”.

Amendment 15, page 11, line 33, after “conduct” insert “both relevant and serious”.

Government amendments 5 to 7.

[Anna Turley]

It is a pleasure to speak today on behalf of Her Majesty’s Opposition about this, my first Bill. The Committee process has been excellent, and I welcome this opportunity to revisit the Bill and talk again about some of the issues that were raised.

The main objective of the legislation is to provide a strong regulatory framework to support the charity sector and its trustees. In particular, it aims to strengthen the Charity Commission’s arm by giving it more powers to regulate charities. That is an important objective, which we support, but we are clear that the right safeguards must be in place. The Charity Commission is the guardian of public trust and confidence in charities. On the whole, it does an excellent job, particularly in the context of the assault on its budget over the past six years. It is important for the integrity of the charitable sector that the commission should have the tools to do its job properly, and for that reason we support many of the Bill’s provisions.

However, as with any regulator, it is vital to ensure that the commission’s powers are subject to appropriate safeguards. Unfortunately, some of new powers for the regulator introduced by the Bill lack such safeguards and therefore leave scope for the commission to overreach itself. That threatens the independence of charities and the integrity and reputation of the commission, and it could fundamentally change the relationship between the commission and the charity sector.

Our concerns are shared by the sector, its advisers and more widely—the Charity Law Association, for example, has said that the new powers in the Bill need to be balanced by appropriate and proportionate safeguards. It points out that the new powers will apply not only in rare cases of deliberate abuse but to all charities and their many hundreds of thousands of well-meaning volunteer trustees.

A group of sector umbrella bodies, including the Directory of Social Change, the Association of Chief Executives of Voluntary Organisations, the National Council for Voluntary Organisations and the Charity Finance Group, have all expressed serious concerns about the lack of safeguards. The Joint Committee of the House of Lords and House of Commons that scrutinised an early draft of the Bill called for necessary safeguards to be included, and, of course, we pushed for those in Committee.

The Minister may point out, as he did in Committee, that the Charity Commission has a statutory obligation to act proportionately. We acknowledge that, but experience has shown that, sadly, that is not enough. In a recent High Court case involving the commission and the Joseph Rowntree Charitable Trust, the Lord Chief Justice referred to “ludicrous time limits” imposed by the commission in a regulatory situation; he said he could understand why it was felt that the Charity Commission had behaved in an extremely high-handed manner in that case.

The commission should, of course, have the power to do its job, but sensible limits should be imposed on how it exercises its powers. Our amendment would redress the balance.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I congratulate my hon. Friend on her excellent speech. I am a trustee of many charities; one of the concerns that those of us who work in the charitable sector have had for a long time is the weakness of the Charity Commission. Usually, its legal department is terrified of a case ending up in the High Court. I support the Bill: we need a strong commission that can do its job as it has not been able to do it for many years.

[Anna Turley]

My hon. Friend is absolutely right; that is why we support the Bill and the powers it gives to the Charity Commission. My hon. Friend is also right in talking about what is sometimes a lack of clarity and a confusion, which can be costly. We are really keen to get clarity on the grey areas, boundaries and improper balances in the Bill. It is really important that we get those on the record while the Bill has yet to be enacted and before we end up with costly processes in the High Court.

I turn specifically to new clause 1 and amendments 9, 8, 10, 11 and 12, which apply to clause 1, which relates to the Charity Commission’s new power to give warnings.

The Bill introduces a new power for the Charity Commission to issue official warnings to a charity or a charity trustee. The explanatory notes say that the power is intended to be used when the risk of an impact on charitable assets and services is relatively low, but the new power could have a far-reaching impact on charities that receive a warning. The Bill gives the commission complete discretion about publicising a warning. That could have serious reputational implications for the charity involved: the public, the media and funders may well not distinguish between a low-level issue giving rise to a warning and something much more severe. It is important that we consider the issue in the context of the high profile media issues raised recently. After all, official warnings issued by other regulators indicate a serious and high level of concern; under the Bill, the commission can issue a warning on the strength of a low-level breach of trust or just a breach of duty by a charity trustee. Indeed, it is our understanding that it intends to use the warning power in low-level cases.

As all hon. Members know, reputation is paramount for charities and charity trustees. The adverse publicity resulting from a warning could lead to a choking off of donations, grant funding and corporate sponsorships, leading to a closure of services and, potentially, to redundancies. A warning can be used as a trigger for further regulatory action; clause 2 makes a change to the circumstances in which the commission can take significant protective measures in relation to charities so that the failure to remedy an alleged breach of trust or duty specified in a warning is automatically a trigger to more serious action. That seems a startling implication for a power intended to be used in low-level cases and makes it all the more important that there should be safeguards around the exercise of the power.

Our amendments address those concerns in four ways. First, through amendment 9 and 8, they would limit the commission’s scope to publish the warning to a wide audience. The charity and its trustees would receive the warning, but no wider publicity would be involved. The warning would ensure that the charity took the commission’s concerns seriously, but would have no adverse effect on its reputation. If the charity failed to comply with the warning, the commission could take more significant regulatory action at that stage, and that might attract publicity. Low-level concerns, however, would not be publicised, to ensure that the commission’s action was proportionate and did not seriously impact—potentially fatally—a charity for a relatively minor error.

[Peter Kyle (Hove) (Lab)]

It has been stated numerous times that the Charity Commission often sees itself as a partner in trying to improve and work with charities. Would not the method that my hon. Friend is describing be one more of partnership, using the expertise of the Charity Commission to improve and tackle the challenges that charities face in the front line? That is a much more collaborative approach, aimed at delivering outcomes for the beneficiaries, rather than a public bust-up, which could damage the Charity Commission, charities as a whole and the individual charity concerned.

--- Later in debate ---

[Anna Turley]

My hon. Friend makes an extremely important point. It is clear that when the Charity Commission works in terms of its role of supporting, encouraging and giving guidance to charities, it is extremely effective. Particularly given the pressures on its finances, expecting it to undertake a wide range of enforcement in this manner is potentially quite costly.

Alternatively, amendment 10 would allow the commission to make details of the warning public without referencing the charity, or a charity trustee, by name. This would allow the commission to publish a warning anonymously if it felt that it held important lessons for the wider charitable sector, but without the consequent impact on the charity.

Secondly, under amendment 11 the commission would be obliged to give the charity adequate notice of its intention to issue a warning. The Bill states that

“the Commission must give notice”,

but there is no specified notice period. That means that there is nothing to stop the commission giving less than 24 hours’ notice of its intention to issue a warning, which would give the trustees, who are very often hard-pressed volunteers, and any charity staff almost no time to respond. This is a serious risk. In the High Court judgment that I mentioned, it is understood that charity trustees were given less than 24 hours to respond to the commission, prompting the Lord Chief Justice, as I said, to describe the time limits as “ludicrous”.

This concern has already been raised by the Joint Committee that reviewed an earlier draft of the Bill. It recommended that a reasonable minimum notice period to make representations on a draft warning should be made clear in the Bill. The Government’s response to the Joint Committee’s report accepted that a recipient should have the opportunity to make representations on the warning for the commission to consider before it is published. In our view, this requires the inclusion of a minimum notice period in the Bill, and that is what our amendment seeks to achieve. The Government may argue that there could be circumstances where the commission has such serious concerns that it must act swiftly and without notice. In such cases, the commission should exercise some of its other regulatory powers designed for more serious concerns, some of which may be used without advance notice. We have been told that the warning power is not intended for such serious cases.

We also propose a small amendment, amendment (a), to Government amendment 2 on the proposed power to withdraw or vary a warning. Our amendment is designed to help reduce any reputational damage to a charity that might result from the inappropriate issuing of a warning. It is absolutely right and fair that if the warning was subsequently found to have been incorrectly given, then it should be publicly revoked and any damage sought to be undone.

Thirdly, amendment 12 seeks to ensure that it is absolutely clear in the Bill that the commission will not be able to use its warning power to direct charities. It is not appropriate for the commission to be able to direct charity trustees on how to act. It is very clear from the Charities Act 2011 that the commission is not able to act as a charity trustee except for very limited exceptions. In a small range of circumstances, the commission can issue statutory directions to charities, but these are rightly subject to very strict safeguards. It seems that the Government agree with this principle. In responding to the consultation on the extension of the Charity Commission’s power that was a precursor to the Bill, the Government specifically decided not to extend the commission’s powers to make directions outside a formal statutory inquiry. If the commission could use the warning power as a way to direct charities, it would be able to give directions via the back door. This is a fundamental shift in the delicate balance of the relationship between the commission and charities, and it should not be allowed.

We would welcome some clarification from the Minister on this point, as there seems to be confusion in the sector about it. We understand that the commission does not regard the warning power as giving it the power to direct charities, yet the explanatory notes to the Bill imply the opposite, stating:

“Where the Commission considers it disproportionate and unnecessary to open an inquiry purely for the purpose of making a direction, issuing an official warning could be an alternative way of making it clear to a charity that they should take action.”

Confusion over a similar issue gave rise to the High Court case that I mentioned, prompting the Lord Chief Justice’s comments about the commission’s actions. Our amendment makes it clear that while a warning can be used to give advice or guidance to a charity—which can often be very positive, as my hon. Friend the Member for Hove (Peter Kyle) said—in order to remedy the conduct that gave rise to it, it absolutely cannot be used to direct the trustees to take action.

New clause 1 would allow for the issuing of a warning to be appealed to the Charity Tribunal. I have already explained the potentially significant consequences that the issuing of a warning has for a charity. The Charity Tribunal is a low-cost forum that was established in the Charities Act 2006 especially for charities wishing to challenge the commission. In the absence of an express right of appeal, charities affected by a warning are able to challenge it only via judicial review. Judicial review is expensive, complicated, and time-consuming. It is a completely inappropriate option for a mechanism that is intended to address low-level non-compliance. The Charity Tribunal was introduced precisely so that charities would not have to rely on costly judicial review proceedings to challenge the commission’s decision making. There is no good reason, and I am afraid none was forthcoming in Committee, as to why it should not be possible to appeal an official warning to the Charity Tribunal. It is illogical that the exercise of the warning power should be more difficult to challenge than the exercise of the commission’s more extensive regulatory powers, which can be appealed to the Charity Tribunal.

--- Later in debate ---

[The Minister for Civil Society (Mr Rob Wilson)]

It might be helpful if I clarify one of points that the hon. Lady raised about the power to direct. An official warning is not the same as a direction power. I am aware of the potential confusion regarding the explanatory notes that she mentioned. If it is helpful to her, I would be happy to ensure that the explanatory notes are updated to make it absolutely clear that the warning power cannot be used to direct charities.

[Anna Turley]

That is very helpful indeed. I really appreciate the Minister being so quick and forthcoming with his clarity on that, which will give the sector a lot of reassurance.

I now move on to our new clauses 2 and 3. New clause 2 seeks to replace a clause that was put into the Bill during its passage through the other place but removed in Committee. I pay tribute to our noble Friends in the other place who successfully added the clause to the Bill. As with so much legislation at the moment, we are finding them to be great defenders of social justice and fairness.

New clause 2 would support trustees in carrying out their existing duties by ensuring that they can adhere to their charitable aims and objectives, and it would protect them from being compelled to undertake an action at odds with their charitable purposes. As we have always made clear, especially in Committee, the provision is particularly relevant to housing. It aims to protect charities and housing associations if the Government mandates them to sell their charitable property under the right-to-buy proposals.

Labour Members want those who desire to be homeowners to achieve their aspiration. While the number of homeowners has fallen by more than 200,000 under this Government, the number rose by more than 1 million under Labour between 1997 and 2010. I want to be clear that we support people’s aspiration to own their own home.

[Kelvin Hopkins (Luton North) (Lab)]

I agree with what my hon. Friend is saying, but the level of owner-occupation is declining because house prices have risen way beyond the ability of most people to afford them. Is not the real problem the need to have decent social rented housing, and should we not keep all existing social housing in the public sector to make sure we can house people properly?

[Anna Turley]

My hon. Friend makes an extremely important point. We know that home ownership is falling and, as he says, the real crisis is in social housing. The purpose of new clause 2 is to protect what social housing we have and maintain it in the hands of the charitable sector and housing associations that own it, as well as to ensure that it is used for its intended purpose, not sold off for profit.

The problem our new clause seeks to address is that of compulsion. This is about the fundamental rights and the position in law of housing associations and charities. The independence of the charitable sector from Government is an important strength of British civic society, and one that must be cherished. We do not support the right of a Government to direct a charity, against its independent will and contrary to its charitable purposes, to dispose of its assets according to the Government’s desire. That is an infringement of the independence of charity, community and voluntary sector organisations. For many housing associations, it goes against the very grain of their founding purpose.

Housing associations, many of which are charities, provide 2.5 million homes for 5 million people on affordable rents. Many enable vulnerable people, or those with disabilities or care needs, to live independently. Other properties are for shared ownership, to help those on lower incomes to buy their homes. These aims are in the charitable DNA of housing associations and are not for the Government to tamper with.

The unintended consequences of the right-to-buy proposals for housing associations could undermine charity law that goes back centuries. In essence, the proposals will allow the assets of independent charities, and even the bequests of individuals or philanthropists—for example, the Peabody Trust, which has built and bequeathed housing to ameliorate the conditions of the poor and needy—to be seized. Housing associations currently build 45,000 homes a year. Ideally, they would like to build 120,000 homes. That aim may be undermined if they are forced to sell off their stock.

Housing associations often lever in private finance on the basis of assets they already own in order to meet their wider charitable objectives and to manage their assets effectively. Right to buy will force housing associations to sell properties. It will give them less control over such decisions. Importantly, in relation to this Bill, it will make it more difficult for them to meet their charitable purposes.

Furthermore, any diminution of the housing stock could harm housing associations’ borrowing powers. The National Housing Federation has said:

“With a nation in the throes of a housing crisis, it is key that housing associations are in full control of the assets against which they borrow to build homes.”

Labour, as well as many housing associations around the country, has always said that the extension of right to buy to housing associations, through the Housing and Planning Bill, is unworkable and wrong. It will lead to a severe and irreversible loss of affordable homes at a time when they can never have been more needed, because the Government have no genuine plan for one-for-one, like-for-like replacement. Historically, only one in 10 homes sold have been replaced under the right to buy.

[Kelvin Hopkins]

Even those who support the sale of council houses and of housing association properties say that if the subsidy came directly from the Treasury, that would be very different from making housing associations and local authorities pay for the subsidy out of their assets.

[Anna Turley]

My hon. Friend is absolutely right. It has been apparent throughout the proceedings on the Housing and Planning Bill that there is a black hole in the plans to fund the whole proposal.

There are currently 2 million people on waiting lists due to the dearth of homes on affordable rents for low earners. Our new clause 2, which protects housing associations from being compelled to sell off homes, would prevent the further reduction in the supply of affordable social housing. Too often, history has shown that right-to-buy homes are resold. Many homes are rapidly rented out by private landlords at the full market rent, which serves to drive up market prices and increase poverty through higher housing costs, as well as reducing the housing stock available on affordable rents. All of that goes against the charitable objectives of most housing associations.

In summary, we are concerned that the Government want to interfere with the duties of charity trustees to put their beneficiaries first and to comply with their fundamental charitable purposes in how they manage their assets. Housing associations can already partake of right-to-buy options for their tenants where that accords with their charitable objectives. The problem arises where that conflicts with their objectives and trustees’ duties risk being overridden by the Government, which is simply not acceptable. That is what the new clause seeks to prevent.

New clause 3 would enshrine in legislation the right of charities to undertake political campaigning activity. We are clear that this is a direct attempt to challenge the unfair and poorly applied Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014, commonly known as the gagging Act. Campaigning is an important part of democracy and civil society. One of the fundamental principles of a thriving and healthy democracy is that individuals and organisations can speak out on the issues they care about.

[Mark Field (Cities of London and Westminster) (Con)]

On new clause 2, the hon. Lady made a case about charities’ ancient rights. She will be well aware that the ancient rules, going back 400 years to the time of James I, were very much against charities involving themselves in politics. I accept that there have been changes in charity law more recently, but it seems rather perverse that she prays in aid ancient charitable rights in relation to new clause 2, but is happy to ride roughshod over them in new clause 3.

[Anna Turley]

On the contrary, it was the gagging Act that rode roughshod over the historic rights of the charity sector to defend and campaign on the causes that charities fundamentally exist to tackle.

[Peter Kyle]

My hon. Friend makes an incredibly powerful point. This is about freedom of speech for everyone—every citizen and every organisation in this country—but it is also about making sure that the disempowered, both individuals and communities who lack a voice, have advocates that can speak in as unencumbered a way as is humanly possible and with the ferocity that those in our society who lack a voice deserve.

[Anna Turley]

My hon. Friend is absolutely right. He pays tribute to the charities that do some of the most important work with the most excluded. Such people need a voice and are often those who suffer the consequences of bad policy making in this place. Charities often have to pick up the pieces of such policy making.

[Susan Elan Jones (Clwyd South) (Lab)]

I am slightly mystified by some of the comments about so-called political activity. We are talking about basic advocacy. We only have to go back to the end of the first world war to see the Royal British Legion campaigning for jobs for veterans and so on. We are not talking about party political campaigning. That is what the voluntary sector objected to in the 2014 Act.

[Anna Turley]

My hon. Friend is absolutely right. As she has ably demonstrated, charities have a long-established role in educating, informing the public, campaigning and securing positive social change throughout our history.

[Wendy Morton (Aldridge-Brownhills) (Con)]

Use of such terms can seem a little bizarre, but does the hon. Lady not agree that charities can already make representations, including to us as Members of this place? One of the big things about charities is that they have a special ethos that drives their work and activities. I therefore cannot understand why we should support new clause 3.

[Anna Turley]

It is quite clear that the charitable sector felt that the 2014 Act prevented them from being able to pursue exactly the aims that the hon. Lady sets out. We in this House share many things in common with the charitable sector, not least the effort to build a better society, so it is absolutely right that we should work together in partnership to build better policy making and to shape the kind of society that she cares about. Our new clause has not come out of thin air. We are reacting to a very bad piece of legislation, about which the sector feels extremely strongly. We want to continue to protect the sector.

[Wes Streeting (Ilford North) (Lab)]

Part of the problem is the use of the word “political”. Before the introduction of the gagging law, there was no provision for charities to engage in party political activity—activity in favour of a political party—and CC9, the Charity Commission’s guidance document on campaigning for charities, is clear about that. What problem does my hon. Friend think the Government were trying to solve when they introduced the gagging law? I do not think there was any such problem.

[Anna Turley]

My hon. Friend is absolutely right. I think the problem was that the Government felt challenged. From the outside, they were happy to talk about being the most open and transparent Government ever, but once in power, they pulled up the drawbridge and were nervous about the challenge they faced from the sector on key issues such as badgers and the bedroom tax.

[Mark Field]

No one minds scrutiny. We are very happy to have bodies that want to engage in political lobbying, but they should not be charities. Charities have certain benefits, including tax benefits. Bodies that wish to be party political, biased advocates are perfectly able to be so if they are companies or other corporations. The point is that the charitable sector brings with it a range of benefits, not least in terms of taxation, that should not be abused for party political purposes.

[Anna Turley]

Would not the right hon. Gentleman agree, therefore, that for a charity that is picking up the pieces left by diseases such as cancer or heart failure, it is a better use of taxpayers’ money to lobby for better investment in prevention and research and development?

[Robert Jenrick (Newark) (Con)]

I am sorry to relive arguments that were heard in Committee, but the only example that was given to the Committee of the so-called chilling effect or of a charity being prohibited from carrying out activities by the so-called gagging law was that of the Badger Trust. That organisation was explicitly party political. The chief executive officer, Dominic Dyer, sent out an email using the charity’s email system to all its members, who may have had any party political affiliation or none, saying that he had contributed to the Labour party’s rural manifesto, that it was wonderful, that they should turn up at the launch of the manifesto, that they should take part in an anti-Cameron rally and, presumably, that they should vote Labour. The hon. Lady said that she supported that kind of behaviour, which was illegal. Surely Members from all parts of the House can agree that such behaviour is wrong. New clause 3 should be defeated because it would give the green light to that sort of extremely negative behaviour.

[Anna Turley]

I am surprised that the hon. Gentleman has a problem with negative behaviour—I am afraid that it is a fact of life. Having looked at the evidence from the Charity Commission on that case, I still struggle to see what was wrong with the situation. I am very happy to continue that conversation with the Charity Commission.

The hon. Gentleman says that that was the only evidence given. More than 160 charities signed a letter to the Government ahead of the general election saying that the legislation should be scrapped, including Save the Children, the Salvation Army, Oxfam, Greenpeace, Age UK and Amnesty International. The charity sector is up in arms.

[Susan Elan Jones]

Surely the big problem that people had was that they did not like the idea of dodgy lobbyists giving money to dodgy politicians. It was not about victimising groups such as the Salvation Army. The hon. Member for Newark (Robert Jenrick) says that it was just the Badger Trust that was affected. If he had heard what the Countryside Alliance said at the all-party parliamentary group on civil society and volunteering about what it thought of the gagging Act, he would accept that a wide variety of groups are affected.

[Anna Turley]

My hon. Friend makes an extremely important point about the strength of feeling in the sector.

[Martin John Docherty (West Dunbartonshire) (SNP)]

I share the concerns of the hon. Member for Clwyd South (Susan Elan Jones). Does the hon. Member for Redcar (Anna Turley) agree that the gagging Act would have limited even the calls for the creation of the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly, which were led by the Church of Scotland, which is a registered charity in Scotland? Without new clause 3, it will not be possible to have an impact like the one that the Scottish Parliament has had on the so-called unwritten constitution of the United Kingdom.

[Anna Turley]

The hon. Gentleman makes an important point and I thank him for that contribution. I will make some progress, because I am conscious that many Members want to speak.

Not only should charities have the right to campaign, but they are often best placed to provide important insights that can inform and improve policy making. They are often the ones on the frontline who see the gaps in provision, the duplication of services and the inefficiency and waste, and who spot the best ways of solving or, better still, preventing problems. Many charities can make a bigger impact with their limited resources through campaigning than through service delivery alone.

Campaigning often saves taxpayers money in the long term, as issues can be addressed at their roots, rather than in the aftermath, which can be costly. For example, as I just mentioned, many charities provide fantastic care for patients with long-term conditions such as cancer, but is it not better for them to push for more effective treatment, more awareness of the symptoms and more support for diagnosis through campaigning? So much of that happens as a result of good policy making by politicians. That is why charities must seek to shape it.

[Maggie Throup (Erewash) (Con)]

I fear that under new clause 3, the hard-earned money that people donate to charities would be spent on political campaigning, rather than the initial cause to which they donate, such as true medical research. That is why the new clause is flawed.

[Anna Turley]

I am surprised that the hon. Lady presumes to know what people want to happen when they donate money. Many people who donate money to large charities such as Crisis and Shelter are very aware of the high-profile public campaigning that they do and of the pressure that they put on all of us in this House. That is to be commended. Many people support the powerful voice that such charities have in the community.

[Kelvin Hopkins]

To reinforce that point, many people support and donate to such charities precisely because they campaign.

[Anna Turley]

I completely share my hon. Friend’s view and am grateful for his supportive intervention.

Charities themselves have set out their concerns, including the fact that the scope of the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 is very broad. They are concerned that the legitimate day-to-day activities of charities and voluntary organisations that engage with public policy will be caught by the rules and that a number of regulated charities, voluntary organisations and other groups will be substantially affected. They feel that the Act is incredibly complex and unclear, and that it will be difficult for charities and other voluntary groups to understand whether any of their activities will be caught, giving rise to the risk that campaigning activity will be discouraged.

Charities also feel that the 2014 Act gives substantial discretion to the Electoral Commission, creating an unnecessary and burdensome regulatory regime and possibly leaving charities, voluntary organisations and the Electoral Commission open to legal challenge. The legal opinion provided to the National Council for Voluntary Organisations by election law experts suggested that the rules were so complex and unclear that they were

“likely to have a chilling effect on freedom of expression, putting small organisations and their trustees and directors in fear of criminal penalty if they speak out on matters of public interest and concern”.

The 2014 Act stopped charities campaigning—they say so themselves—and caused unnecessary cost and confusion, according to a report by the Commission on Civil Society and Democratic Engagement, which looked at its effect on last year’s general election. Drawing on evidence from UK charities and campaign groups, the commission found that charities were faced with confusion about

“the ambiguity of the definition of regulated activity.”

The commission states that as a result of that,

“many activities aimed at raising awareness and generating discussion ahead of the election have not taken place.”

A representative of the World Wide Fund for Nature told the commission:

“I think the Act has created an atmosphere of caution within parts of our sector. It has also wasted time in terms of analysis of it, explaining it to Trustees, staff etc. It is not…a piece of legislation we need.”

Greenpeace told the commission:

“We were meant to be participating in a huge cross-NGO campaign, but all apart from a couple of the organisations ended up not campaigning during the general election period leaving us with not enough partners to run the campaign.”

The Salvation Army stated:

“As we are not traditionally a campaigning charity we were not in danger of exceeding the top limit. However, we were wary of supporting causes that could be considered coalition campaigning because we felt the administrative cost would be excessive and we couldn’t control the level of spending.”

The Commission on Civil Society and Democratic Engagement also found that voluntary groups undertaking Government contracts regularly faced threats to remain silent on key Government policies. Many neglect to speak out on issues that are plaguing society, for fear of losing funding or inviting other unwelcome sanctions.

[Wendy Morton]

Will the hon. Lady give way?

[Anna Turley]

I am afraid that I am nearly at the end of my speech, so I will finish.

The lobbying legislation looks to many in the sector too much like another deliberate and shameless act by a Government who are too scared to debate their record or to be open to scrutiny and challenge. The health of our democracy depends on people’s right to campaign on the issues they care about. The 2014 Act was an attack on our democracy. It limits the rights of charities to fight for important causes. It has left expert organisations that have a vital contribution to make to public debate unsure whether they are allowed to speak out. We seek to protect the right of charities to have a loud and respected voice in our democracy. I commend new clause 3 to the House.

[Sir Edward Garnier (Harborough) (Con)]

I congratulate the hon. Member for Redcar (Anna Turley) on her first speech from the Dispatch Box in the Report stage of a Bill. She gave a thorough explanation of her case on behalf of the official Opposition, although I am not entirely sure that I agreed with all of it. No doubt she gave it a lot of thought. She certainly gave us the benefit of her views.

I will not follow the hon. Lady up and down the badger setts of England and Wales, if that is all right with her, but I will speak to amendment 1, which stands in my name. I will do so, with the greatest of respect, in a slightly less aggressive way than her, although there is nothing wrong with aggression when one has something decent to say. I must declare an interest, as is indicated on the Order Paper, because I am a patron of Unlock, the charity that seeks to help people with convictions, and a trustee of the Prison Reform Trust. Both positions are unpaid.

I became interested in prison issues, the rehabilitation of offenders and so on when the Prime Minister, then the Leader of the Opposition, appointed me in the middle of the last decade as shadow Minister with responsibility for prisons and probation. As a consequence of that appointment, I visited about 65 of the 140 or so prisons, young offender institutions and secure training units throughout England and Wales. It became apparent to me—it was not a new idea, in that others had discovered it previously—that one of the things that contributes to the high levels of reoffending among those people who have been sent to prison and come out again, particularly among youngsters, is that they do not have a job or somewhere settled to stay, and that they have, to put it loosely, relationship problems. If we can do something to help people to form strong, stable relationships with families, partners or others, and if we can find them somewhere stable to stay and live, and if we can help them to get training or work, the chances that they will reoffend and go back to prison are very much reduced.

As a consequence of the voyage of discovery that I went on from 2005 or so until I was appointed shadow Attorney-General in 2009, I wrote a paper called “Prisons with a Purpose”. I hope that the Secretary of State for Justice—I see his Parliamentary Private Secretary, my hon. Friend the Member for Newark (Robert Jenrick), sitting in his place to my left—is picking up many of the ideas that I and my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) pushed forward in that period of opposition.

I suppose it is not a surprise that I have become attached to the Prison Reform Trust and to Unlock, but in speaking to my amendment 1, which is long—it is set out on page 5 of the amendment paper—I invite the Government to have a little think about the disqualification or waiver procedure that applies to people with criminal records, either in so far as they may be trustees of charities that have an interest in looking after ex-offenders, or in so far as they may be employees of those charities.

I hope that the framework of the amendment is clear in itself but, if I may—I will be as quick as I can because I know that my right hon. Friend the Member for Cities of London and Westminster (Mark Field) and other right hon. and hon. Members wish to catch your eye, Madam Deputy Speaker—I hope he and the House will forgive me if I take a little time in setting out what I intend to do. I should confess at the outset that I am very grateful to the Prison Reform Trust in assisting me in preparing for today’s debate.

The purpose of my amendment is to require the Secretary of State to lay before Parliament, before clause 9 comes into force, a report on the impact of the extension of the disqualification framework on people with criminal records who are trustees of, or who are employed by, charities that work with or employ ex-offenders. I intend to urge the Government to provide us with further clarification of the impact of the extension of the disqualification framework on people with criminal records and charities that work with or employ ex-offenders. The amendment also provides an opportunity for the Minister to outline in more detail how he and his Department intend to conduct the review of the waiver process to ensure that people with criminal records who are existing employees or charitable trustees, or who are seeking or intend to seek employment or a trusteeship in a charity, are not unfairly discriminated against.

Clause 9 and the policy behind it are entirely worthy and understandable. We clearly do not want people who are engaged in terrorism to be using charities to move money around or to hide their outrageous behaviour; that is not controversial, but one problem might be the unintended consequence of the clause on people whom the Government may not want to impact. One has only to read out clause 9(5) to realise that someone who comes within

“Part 1 of the Terrorist Asset-Freezing etc Act 2010…or…the Al-Qaida (Asset-Freezing) Regulations 2011”

is not someone whom we want to be involved in charities. That is not a problem, but I am concerned about the unintended consequence of that perfectly understandable and worthwhile clause.

--- Later in debate ---

[Mr Wilson]

I am sure the noble Lords along the corridor will have listened carefully to my right hon. Friend. I hope the Bill will not be altered further as a result of his very strong words.

[Anna Turley]

To take up that point, the right to buy affects charities, and we are debating charities legislation. The right to buy affects the ability of housing associations to control their assets, which is a fundamental change to the balance of the relationship between their role and the Government’s ability to tell them what to do. That is why we have debated it today.

[Mr Wilson]

The Opposition are obviously entitled to propose whatever amendments they want as long as they are in order, but the problem is not just that new clause 2 is completely unnecessary; it would also be damaging, although I am sure that that was not the hon. Lady’s intention.

Many of the rules that apply to charities’ investments in, and their disposal of, assets, derive from case law that has been built up over hundreds of years. Proponents of the new clause argue that it reflects the existing case law, but I simply do not accept that. A simple statutory provision such as the new clause cannot hope to reflect the accumulated detail of case law derived from many hundreds of judgments.

Case law already requires charities to use and dispose of their assets in a way that supports the delivery of their charitable purposes. That provides flexibility for certain circumstances that a statutory provision cannot provide. For example, how would the new clause affect compulsory purchase orders in relation to charity land? How would it affect the existing rights of more than 1.4 million housing association tenants under the preserved right to buy or the right to acquire? How would it affect the exercise of Charity Commission powers such as its power to direct charity property in the course of a statutory inquiry? There are simply too many questions about the measure to which we have not had satisfactory answers either this afternoon or during the course of the Bill’s proceedings.

New clause 2 would give the Charity Commission a new and very broad role in policing the use and disposal of charity assets. That is inconsistent with our current aim of helping the commission to focus on its core regulatory activities.

New clause 3, which is also in the hon. Lady’s name, is at best unnecessary and at worst damaging. Charity law already sets out clear rules on what charities can and cannot do in relation to campaigning and political activity. I explained those in detail in Committee and do not propose to do so again today. New clause 3 might seek to reflect existing law, but it does not. In a similar way to new clause 2, new clause 3 attempts to include in a statutory provision the existing case law. That seriously risks changing the boundaries of what is permitted.

New clause 3 would allow charities to undertake political campaigning or political activity, but does not define what that means.

Would it, for example, allow partisan political campaigning? If that were the case, it would represent a real shift in the law and I would strongly object to that. In particular, I think the public would be very surprised and disappointed to see charities taking part and campaigning on a party political basis. Existing case law does not allow charities to engage in political campaigning to such an extent that it calls into question whether in fact they are a charity or, rather, a political campaigning organisation. Again, it is not clear to me that new clause 3 would incorporate that crucial limitation, potentially opening up charitable status to organisations with a political purpose.

--- Later in debate ---

[Mr Wilson]

The representatives for Scotland were at the fundraising summit recently. This is a devolved matter, and it is up to them what rules they set for Scotland. They do not have to follow; this is an England and Wales Bill, which does not affect Scotland. It is therefore up to the Scottish regulator how they wish to proceed.

I maintain that it is important to keep a clear division between statutory and self-regulatory powers to ensure better regulation of fundraising. The best way to achieve that is to support the new fundraising regulator and, if it should fail, make a decisive and clear move to statutory regulation. Should self-regulation fail, the Government will not hesitate to intervene, which could include tasking the Charity Commission with the regulation of fundraising. However, we think it is too soon to commit the Charity Commission to an enhanced statutory role in fundraising, so I hope my hon. Friend the Member for Harwich and North Essex will understand why I do not support his new clauses 4 and 5.

Let me turn finally to Government amendments 6 and 7. It would not be fair to ask the taxpayer to carry the cost of fundraising regulation if it is the result of a failure by charities to protect the public from their own poor practices. Government amendments 6 and 7 would therefore enable the fundraising regulator or the Charity Commission to charge fees to those it regulates for that purpose. Many of the charities signed up to and paying for the old system of self-regulation were those that followed best practice, and there was a problem of free riders. To guard against that risk, the Etherington review suggested that any charity with fundraising expenditure beyond a certain level should be subject to a levy, requiring the large and medium-sized fundraising charities to pay for regulation.

Should the Government need to compel charities to register with the charity fundraising regulator, it is important that the fundraising regulator is able to levy fees for registration. That is exactly what amendment 6 would enable. Government amendment 7 deals with fees, should the reserve power be exercised for the Charity Commission to regulate fundraising. It would ensure that regulations could provide for the Charity Commission to charge fees across the range of bodies that it would regulate as the fundraising regulator.

I hope my explanations suffice to convince hon. Members that these amendments are an important part of the backstop to self-regulation and will help to ensure the effective regulation of fundraising in future, but I would of course be happy to provide more detailed responses. The main point is that I hope that these amendments are not needed and that charities will support the new, tougher self-regulatory system being established under the leadership of my noble Friend Lord Grade of Yarmouth. I commend these Government amendments to the House.

[Anna Turley]

For the sake of colleagues, I will be brief. I thank everybody for their contributions this afternoon. There is a wealth of experience from the charity sector in the Chamber, which has added a richness to the progress of the Bill.

Let me turn straight to new clause 1. Although I do not share the Minister’s view that judicial review will be more cost-effective—that may be the case for the Charity Commission, but perhaps not for charities that are appealing, many of which will not be able to afford to go to judicial review—I am willing to work with the Charity Commission, the sector and the Government to monitor the use of warnings outside of primary legislation. Therefore, I do not wish to press new clause 1 to a vote, although I wish to test the House on new clause 3 and amendment 8, because I do not feel our concerns have been met on either issue. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 3

Power to make representations

“(1) A charity may undertake political campaigning or political activity in the context of supporting the delivery of its charitable purposes.

(2) A charity may campaign to ensure support for, or to oppose, a change in the law, policy or decisions of central government, local authorities or other public bodies.”—(Anna Turley.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Anna Turley]

It has been an absolute privilege to serve on behalf of Her Majesty’s Opposition on the consideration of this Bill. I pay tribute to all the civil servants and Clerks of the House who have worked so hard on drafting it. I thank all the members of the Public Bill Committee, who gave up so much time to scrutinise the Bill line by line in a constructive and positive way that did the House great credit. I thank the Minister and his team for the open and co-operative approach they have taken to working with us, disappointed as I am—although not surprised, as the right hon. Member for Cities of London and Westminster (Mark Field) pointed out—that none of our amendments were accepted.

I want to place on the record my thanks to the Minister for Civil Society, which I did not have time to do on Report, for clarifying a number of points. He said that the Charity Commission is looking at the likelihood that it will give 14 days’ notice in most circumstances when issuing a warning. That was an extremely helpful clarification. It was also helpful to hear him clarify that the Charity Commission does not see itself as having a power to direct as a result of the warning. It was important to hear that it intends to notify the charity of the reasons why a warning has been withdrawn, which will allow the public record to be set straight. I was grateful for the clarification he gave on those issues.

I thank all Members who have debated the Bill both here and in the other place, in particular Baroness Hayter of Kentish Town. As ever, our noble Friends did sterling work and the Bill is all the better for their experience and expertise. Many Members of both Houses have brought a great deal of experience and knowledge of the charity sector and, as we found out today, its history in Elizabethan law to our debates, which is greatly to be commended.

Finally, I thank those whom the Bill is for: the millions of people in this country who give up their time, week in, week out, to volunteer, fundraise, donate and support in many other ways Britain’s fantastic charitable and voluntary sector. Britain is the most generous developed country in the world and we should be proud of the extraordinary things that are done by extraordinary people in the sector every single day.

There is no doubt that the charity sector has been through a rocky period in the past year. Alongside the ever-shrinking funding from central and local government, the ever-growing demand for the services and support that charities provide, and the ever-increasing public scrutiny, there has been a series of high-profile and deeply damaging cases that, although caused by the actions of a small minority, have had significant repercussions for the sector as a whole.

The sector has taken swift and positive action to respond to those cases, but it is right that, as parliamentarians, we do our bit to ensure that charities have the legislative and regulatory framework they need to enable them to fulfil their charitable objectives, and to maintain their integrity and the strong public support they enjoy. That is what the Bill seeks to do, and why the Opposition have supported it throughout its journey.

It is vital that we get the framework right and that the powers in the Bill serve to support and empower charities to thrive and flourish, and not to stifle or oppress. Charities are fiercely and proudly independent, and rightly so. They do vital work. They work with many of the most vulnerable and challenging people. Many work in the most dangerous places. Charities have to be able to take risks, innovate, shape new thinking and challenge prejudice. They must be able to find new answers to some of the biggest challenges we face in the world, when politicians too often fall short. Regulating such a sector is no easy feat. Getting the balance of regulation right is therefore critical if we are not to damage all that is good about the sector.

Throughout the passage of the Bill, the Opposition have raised a number of concerns. Although our amendments have not been taken up, we will continue to scrutinise and work with the Government to monitor them closely. There are four aspects I want to set out on Third Reading. Our concerns have not diminished, and we will continue to monitor progress.

First, on the new powers afforded to the Charity Commission, we have tried throughout the passage of the Bill to gain concessions on the new and fairly broad power for the commission to give warnings to charities. As the right hon. Member for Cities of London and Westminster said, there is a danger of self-fulfilling bureaucracies. When we put that together with reduced budgets, there is a big onus on the commission to deliver in an ever more challenging environment. Throughout the debate, the Minister has insisted that the commission’s new powers will be used proportionately. We believe that that places a substantial burden of judgment on the commission in the absence of achieving more substantial safeguards in the Bill. We hope he will be proved correct.

Warnings that are meant to deal with low-level issues could, particularly when published, have a significant effect in choking off donations, funding and sponsorship. The reputational damage to a charity could be significant or even terminal. We would have liked a right to appeal a warning through the charities tribunal. We would also have liked to prevent warnings from being published or for the charity not to be identified if the details are published. I was grateful to the Minister for his clarification that the Charity Commission will not be able to direct a charity on the back of a warning. That would have been a significant shift in the relationship and in the independence of charities. We will watch the use of those warnings with care as the powers are implemented.

Secondly, it is important to get the powers relating to the charity trustees right. We were pleased to see the amendment in the Lords that expanded the restrictions on charity positions to those on the sex offenders register but, like the right hon. and learned Member for Harborough (Sir Edward Garnier), the Opposition have concerns—we raised them in Committee—that the detail has not been sufficiently worked through as regards charities that work in the criminal justice system, and that work closely with current and ex-offenders for the purposes of their charitable aims. I welcome the Minister’s pledge to work closely to see that through.

On the fundraising powers, we believe the sector has made great strides in relation to the recommendations in the Etherington review, which we welcomed. The legislation supports that progress with improved reporting and monitoring while maintaining the self-regulation of the sector. It is absolutely right that people’s privacy is respected, that unreasonably persistent approaches are challenged, that people are not placed under undue pressure, and that vulnerable people are protected. The Bill sets standards for all of those things. We will watch that space carefully to see whether the back-up powers the Minister added to the Bill, which we support, will be required. We hope they are not.

Finally, we have tried unsuccessfully to tackle the measures on the freedom to campaign during the passage of the Bill. The Minister and I will not see eye to eye on this. As was shown by the vote today, the Opposition remain committed to the principle that the right of charities to campaign and influence the political process is a vital part of a healthy democracy and integral to the concept of civil society. As we have discussed today, charities are in the best place to identify problems in public policy, because they are often the ones picking up the pieces of political policy failures. They see the waste and the inefficiency, and they see the opportunity to prevent problems. They can achieve their charitable aims more successfully if they can help to shape the decisions that affect the people and the communities they support.

I am afraid we see before us an illiberal Government who are scared to debate their record or be open to scrutiny and challenge; a Government who have railroaded important proposals, such as tax credit changes, fracking and student grants through Parliament without proper debate; a Government who change child poverty measures and scrap targets they know they will not reach; a Government who see the Freedom of Information Act 2000 as an irritant and the Human Rights Act 1998 as an inconvenience; a Government who refuse to publish Cabinet Office papers for the first time in 50 years; and a Government who have no problem with millions of people dropping off the electoral register.

Charities are but the latest victims of a Government who ride roughshod over the legitimate views and voices of civil society. The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 was part of this fundamentally illiberal approach and a deliberate attempt to gag charities by a Government fearful of public scrutiny and accountability. It is a shame the Government did not use the opportunity we gave them today to put right that wrong.

On all those areas and many more, we will continue to hold the Government to account. We will watch the implementation of the Bill carefully, in particular the balance of power between charities and the commission. Fundamentally, we believe the Bill provides a good regulatory framework for the charitable sector, which, if used well, will enable charities in Britain not just to survive in this most challenging of times, but hopefully flourish.