Corporate Insolvency and Governance Bill

Baroness Anelay of St Johns Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 9th June 2020 Lords Chamber

[Baroness Anelay of St Johns (Con) [V]]

My Lords, I am grateful to my noble friend the Minister and his officials for their online briefing yesterday. I shall focus my remarks on the economic impact of the pandemic on the voluntary and charitable sectors, and the potential for the Bill to assist them to continue to operate effectively.

The National Council for Voluntary Organisations gave evidence to the DCMS Select Committee in the House of Commons last month. NCVO estimates that charities will lose approximately £4 billion in projected income in the three months from March this year. Age UK, for example, reported that the closure of its 400 charity shops resulted in the loss of one-third of its income overnight. Some charities have reserves that can be drawn upon, but only marginally in most cases. When drafting this legislation, what meetings did Ministers or officials have with representatives of the charitable sector to take their concerns into account?

Last week, I was able to benefit from a webinar on the Bill, which was set up for the charity sector and hosted by the NCVO, in association with Bates Wells solicitors. I shall draw upon the questions raised during that webinar and seek clarification from the Minister today.

The Bill provides to companies, including charitable companies, temporary easements on company filing requirements and requirements relating to meetings, including AGMs. It is welcome that the Bill permits a period of flexibility for members’ meetings in the period 26 March to 30 September. It is also welcome that the flexibility in the Bill allows a charity to do things, even if those things are not permitted by their own governing document. The particular issue on which charities have found difficulty is holding AGMs in accordance with their governing document. They cannot convene an in-person meeting with any guarantee either that they could secure a quorum in the timeframe allowed for holding their AGM or that they could ensure access that is fair to all.

Schedule 14 sets out some provisions on the holding of meetings, and appears to suggest that a quorum can be formed by an entirely virtual meeting. Can the Minister confirm that is the case? Can my noble friend also confirm that, if an organisation has already held its AGM virtually or in hybrid form, even though its rules do not permit that format, the Bill will ensure that the meeting is deemed valid retrospectively? Can my noble friend also clarify the correct way to record the place of a virtual meeting? Is it the location of the chair or the name of the IT platform, such as Zoom or Microsoft Teams?

Finally, I would be grateful if the Minister would clarify exactly which type of charity will benefit from this greater flexibility. Does the Bill cover only charitable incorporated organisations and community benefit societies? If so, it would exclude help to all those charitable and voluntary bodies that have been set up by an Act of Parliament or charter. Have the Government had discussions with such organisations to see what further assistance could be offered to them? Have they also discussed this with the Charity Commission to see what assistance it might provide? I look forward to the Minister’s response today.